The Australian Financial Review, which allegedly is one our most serious and respectable newspapers, recently published a headline and article which declared that Australia is on the cusp of a rental crisis.
It beggars belief that this supposedly credible publication has only just realised that there’s a serious shortage of rental properties in Australia.
Australia has had a chronic shortage of homes available for rental for several years and it’s getting worse year by year because our state and federal politicians appear to be oblivious to the problem.
Right now, locations with vacancy rates below 1% are the norm across the nation.
This means there’s a dire shortage of rental properties almost everywhere.
And, as a consequence, rents are rising strongly in cities and regional centres all over the country.
In many locations, hopeful tenants can’t find a rental property at any price. But where there is something available, there’s lots of competition from other prospective tenants – and it’s common for people to offer more than the asking rent to beat the competition.
So rents are rising, almost as fast as sale prices.
But this is not a new situation. This has evolved over the past five years, as a result of a series of major decisions by politicians and bureaucrats which have discouraged property investment in Australia.
Decisions by various state governments, decisions by the Federal Government, mandates from APRA and rhetoric at the last two Federal Elections by the Labor Party – have all worked to discourage property investors.
Rental vacancies are an outcome of investor activity. When investors buy real estate, homes become available for tenants to rent.
But, for the past few years, investors have been sitting on the sidelines.
So, steadily, little by little, vacancies have become smaller and smaller.
The only way to fix this problem is for governments to stop discouraging investors and do the opposite – provide incentives for investors to get into the market and lift the pool of homes available for rental.
The bottom line – is that this situation is not great for people who need to rent, it IS a great time to be a landlord in Australia.