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Are we on the brink of another rental crisis?

Tenants are doing it tough right now, with vacancy rates in most Australian capital cities’ hitting new record lows, and increasing competition to secure accommodation forcing prices in a steep upward trajectory.

Many experts are warning of a looming rental crisis, with Perth fast becoming the hardest city in which to find a decent rental property without paying through the teeth.

In a ninemsn report Matthew Quinn, managing director of multi-million dollar developer Stockland, said even though house prices in Perth have come off the boil in a big way recently, the same couldn’t be said for the rental market; where the vacancy rate within Stockland owned projects has fallen to less than one per cent.

“Rents are going through the roof, just ask anybody who’s tried to rent a house in Perth in the last six months – it is a nightmare,” Quinn said.

And while Perth might be one of the toughest cities to crack for would-be tenants, it’s certainly not the only Australian capital where renters are struggling to literally get their foot in the door.

Quinn said the combined impact of the ongoing housing shortage and affordability issues pushing more young Australians into an already tight rental market is pointing toward another rental crisis in the near future.

He paints a picture not unlike that we saw last decade, of house hunters queuing down the street at rental inspections and desperate tenants offering to pay more just to get a roof over their heads.

“It’s already happening and it’s going to happen in greater and greater numbers because housing is undersupplied, it’s unaffordable and rents are now going up.”

Not so great for tenants, but not so bad for investors who can look forward to their portfolios returning better cashflow as interest rates remain relatively low and rental yields continue to climb.



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About

Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and his opinions are regularly featured in the media. Visit Metropole.com.au


'Are we on the brink of another rental crisis?' have 2 comments

  1. Avatar for Property Update

    June 12, 2012 @ 2:31 pm Cathy

    I recently had to move out of my rental of 10 years and am now living with family and friends. I am single and 50 and work full time. I could NOT believe how utterly revolting Real Estate Agents have become with regards to their treatment of tennants. I am appalled at the blatant lack of respect for potential tenants by home owners and agents. I am lucky enough to have fabulous friends who have bought me a property to rent, thus saving me the pain and nightmare of trying to attend home opens (at ludicrous hours during a working day), battling the 20-30 other people applying, the shocking treatment and total lack of respect by managing agents, the “bartering” for a property (one woman offered to advance pay her rent for 7 months, most people rental can’t match that). The whole industry needs to be overhauled and QUICKLY. Agents and property owners need to start RESPECTING their tenants – they are paying their mortgages!! Agents need to start treating potential tenants like HUMANS, and actually doing some WORK for their wages! Tenants are clients too, and they are income! I want to stand up and shout so loudly until somebody does SOMETHING about this utterly disgusting treatment of people looking for a rental. Agents should be absolutely ashamed of themselves, they are horrible, horrible people. We need a SOLUTION to the rental crisis, NOT to be made to feel like second class citizens when trying to find A HOME!!! Rents are beyond outrageous for the property too, this needs to be regulated. More affordable housing needs to be available. I would LOVE to buy, but the ridiculous house prices in Perth make that impossible for me while our real estate is grossly over priced. The government needs to step in, and FAST! The whole industry needs to be reformed, and housing needs to be a priority for our government. We are going to see more and more people homeless, families in crisis, more demand on our welfare. Where on earth can I go to be heard, to start making things change, to FORCE change!! I really want to know because I really want to act on behalf of all the people who have been humiliated, belittled, demoralised and shattered by this MASSIVE RENTAL CRISIS IN PERTH.

    Reply

    • Avatar for Property Update

      June 12, 2012 @ 2:48 pm Michael Yardney

      Cathy
      Sorry to hear of the way you and other tenants are treated.
      I know at Metropole our team treat tenants with the same respect we treat our property owners

      Reply


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