[Podcast] Unravelling Australia’s Rental Crisis with Dr. Andrew Wilson: Insights & Endgames

If you're interested in property, you'll know that our rental markets are in crisis.

Vacancy rates have dropped to all-time lows, rental stock remains extremely slim, and rental prices continue to skyrocket.

So how did we get into this rental crisis?

How long will it last, what does it mean for you and me as a property investor, and are there some ways the government or regulators can alleviate this crisis?

In today's episode, I discussed this with Dr. Andrew Wilson, the Chief Economist of my Housing Market.

Andrew is a bit controversial, but I think together we've come up with some ideas of how to solve or at least alleviate the crisis.

However, let me make one prediction: the government won't do any of those because they're not politically suitable or favourable.

Anyway, let's talk about the rental crisis and what it may mean to you as a property investor, as well as what's ahead for our housing markets.

Tackling the tensions in Australia's rental realm with Dr. Andrew Wilson

Currently, rents and property prices are rising with no end in sight.

We're not building enough dwellings at a time when our population is growing at record levels.

Rental vacancy rates are at historic lows in many suburbs and many towns around Australia and there's also booming buyer demand in many locations.

This is all good news for investors, but the media is telling us we're in a housing crisis and the media is telling us the government must do something.

It seems like the government's coming up with some knee-jerk reactions.

Are we really in a crisis?

If so, when will it end?

What can we do about it?

Australia's leading housing economist, Dr Andrew Wilson, Chief Economist of my Housing Market explores these questions with me in today's podcast.

• The crisis is primarily for tenants, not landlords
  • Plenty of demand for new housing supply means it’s not a crisis for the building industry either
• The current rental situation has been building for some time due to constraints on appropriate construction
  • Vacancy rates show there just aren’t enough properties for a balanced market
  • In most areas in Australia, vacancy rates are below 1%
    • A rate closer to 2% would be preferable
  • The federal government has talked about building 1.2 million homes, many of which would be apartments, over the next five years.
    • However, currently, this isn’t financially viable
  • Government policies such as tighter rental laws are also discouraging investors
  • State-based legislation favouring tenants makes landlords feel as if they have no control over their properties
  • The demographics of renters and landlords are changing, with many investors under 30 and over 40% of tenants over 45
  • A good relationship between landlords and tenants is vital for both parties
    • Casting investors as villains undermines that relationship, and is detrimental to both
  • Real incomes have been falling
    • This makes it harder to get out of the rental market and become a property owner
    • It will also cause changes in household formation as people share accommodation, live with their parents longer, or choose different properties than they would have chosen in the past
  • Giving investors more certainty would help bring them back to the market
  • APRA's policies and their unintended consequences on the housing market
  • Bank policies that could change to treat different states and suburbs differently instead of using one-size-fits-all solutions
  • How governments could get investors back into the market by using stamp duty concession for investors or other deposit schemes
  • How international students drive the economy and subsidize universities
  • Inflation and rising rental rates are not likely to end any time soon
    • That means there are good opportunities in the housing market for investors

Although a rental crisis exists for renters, our conversation today highlights the investment opportunities that still exist within these challenges.

Listeners who remain informed and are proactive in their property and wealth-building endeavours can take advantage of these opportunities.

Links and Resources:

Get the team at Metropole to help build your personal Strategic Property Plan Click here and have a chat with us

Get a bundle of eBooks and reports – www.PodcastBonus.com.au

Join Dr. Andrew Wilson and me at Wealth Retreat 2024 on the Gold Coast in April 2024 – click here to find out more

Some of our favourite quotes from the show:

“I think current investors are not prepared to fund those off-the-plan purchases, and currently overseas investors are very wary. Chinese investors in particular, are not funding all those new towers.” – Michael Yardney

“International students bring money into the economy. They also help subsidize our universities.” – Michael Yardney

“I know it's cliche, but you only get so many spins around the sun. Nobody knows exactly how many they're going to get, so why merely tolerate and endure your existence? Why not wake up every morning charged with the electricity of hope” – Michael Yardney

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