Finding tomorrow’s hot property, TODAY

How long could we reasonably expect governments to take, to sort out a problem like the rental shortage?

I ask the question because we have had the problem of a shortage of options for tenants in Australia – and the consequent steep rises in rents – for a very long time.

And it keeps getting worse, not better.

The latest data from SQM Research shows that, nationally, the vacancy rate got a little worse last month, dropping from 1.3% in August to 1.2% in September. 

Three of our capital cities have vacancies well below 1%.

And in six of the eight capital cities, vacancies stayed the same or got smaller in September. In only two cities was there a slight improvement. 

But the key piece of information is the longevity of this rental shortage crisis. 

Australia has had vacancies below 1.5% for close to three years now.

It’s generally considered that a balanced rental market – one in which there is ample supply of homes for tenants to choose from and rents are stable – is one where vacancies are at least 3%.

The data from SQM Research shows that Australia has not had a vacancy rate as high as 3% at any time in the past 20 years.

The closest we came was 2.9% in April 2020 after the onset of Covid caused major disruption to property markets. 

Since then, the national vacancy rate has dropped sharply, reaching 1.2% in March 2022 – and it has hovered between 1% and 1.3% for the past two and a half years.

According to SQM Research, a further 1,700 rental properties disappeared from Australia’s rental market in September – at a time when the nation’s population has surpassed 27 million.

The SQM report said: “The total number of rental vacancies now stands at 37,932 residential properties, a decrease from 39,665 in August.” 

There are clear reasons why we have had this steady decline in the number of properties available for rental, a shortage which has caused rents to rise and rise.

Mostly, those reasons relate to the decisions of politicians, particularly state politicians, in making life increasingly onerous for the investors who provide over 90% of the homes that people rent in Australia.

State and territory governments have increased taxes on investors and have changed the rental laws in ways that have eroded the rights of the owners.

This has led to a reduction in the number of homes available for rental.

In Victoria, the state with the most onerous conditions for investors including big tax increases, the number of rental properties in the state has fallen by 22,000 so far this year, as the investor exodus gathered momentum on the back of anti-landlord legislation.

That’s according to new data from the Department of Families, Fairness and Housing.

And its data supports a trend identified in the latest Investor Sentiment Survey published by PIPA – the Property Investment Professionals of Australia (PIPA).

The survey described a “sell-off of investment properties around the nation” that has “continuing unabated” and “fuelling fears of an even tighter rental market”.

But the problem is most acute in Victoria. PIPA Victoria board director Cate Bakos says legislative changes and increased taxes are driving investors from the state.

A new land tax regime, minimum rental property standards legislation, and policies that are seen as overly tenant-friendly have caused many investors to sell up in Victoria.

Nicola McDougall, the Chair of PIPA says: “This is predominantly due to its plethora of anti-investor rental reforms, as well its new land tax regime that is set to cost investors billions of dollars over the years ahead.”

PIPA’s annual investor sentiment survey found Victoria was regarded as the “least accommodating” state or territory for property investors in the nation, with 22% of survey respondents indicating they had sold at least one dwelling in Melbourne in the last year.

As a consequence, rental availability has fallen and rents have risen.

Data from Domain shows that the vast majority of Melbourne suburbs recorded rent rises this year, continuing a trend that has extended over several years.

According to the Domain rent report for the September quarter, the median house rent in Melbourne at the start of 2022 was $440 a week. Now it’s $580 a week.

The median unit rent was $375 a week in January 2022 and now it’s $550 a week. That’s an increase of almost 50% in less than three years.

But the problems keep getting worse, with NSW being the latest state government to pass new laws detrimental to landlords.

REINSW CEO Tim McKibbin says the lessons for the NSW Government are crystal clear but have been disregarded.

He says: “The removal of landlords’ rights under the guise of populist rental reforms has had a clear negative impact on renters elsewhere.

“The rental reforms by the NSW Government will result in more investors selling up or opting for a short-term accommodation strategy, both of which remove more properties from the private rental market.

“This is already happening and it’s happening at a time when the NSW population is increasing by over 15,000 people each month. The rental market is in crisis and we need solutions, not reforms that we know from recent experience will make the problem worse.”

And that pretty much sums up the seriousness and absurdity of this ongoing issue.

Australia has had a rental shortage crisis for several years but the only policies implemented by state governments have made a bad situation even worse.

breaking-news
Find out how much your home is worth in today’s market. Get an instant market update, obligation-free. Gain insight into what your property is valued at, find out its potential rental yield and more.

Brisbane, Gold Coast, Sunshine Coast, Melbourne

Not all investment property tax depreciation schedules are built the same. They should be but the reality is, like many things in the property world, all is not as it seems. The devil is in the details—and the details are everywhere. But relax, at Washington Brown we take care of every last one.

Established in 1978, Washington Brown is one of Australia’s oldest and most respected quantity surveying organisations.

Each year, we prepare more than 13,500 reports, delivering $1.5 billion in depreciation savings.

At Triple Zero Property, we believe in delivering a seamless experience tailored to your needs. From personalised consultations and thorough research to ensuring transparent fixed-price building contracts and competitive pricing, we are committed to excellence at every stage. Our dedicated team oversees every aspect of your property build, from initial planning and throughout the construction process.

Discover how our comprehensive approach and commitment to client satisfaction sets us apart in in creating wealth through property in Australia.

Established in 2005, Reventon has built on a strong foundation in property investment and progressively expanded the business over the years. Today, they offer a complete range of property and financial services that includes, financial planning, accounting, mortgage broking, buyers advocacy and property management.

Reventon is a fully-integrated holistic wealth and financial planning provider founded by serial entrepreneur, international speaker, wealth specialist and company CEO Chris Christofi.

With Reventon, clients benefit from having all their needs met through a single relationship with a dedicated, experienced and trusted team. Our seamless service offers more convenience, greater control and ultimately a better client experience with better financial outcomes.

The propertybuyer team has been in business over 23 years and purchased over 4000 properties. Propertybuyer is a totally independent “Buyers’ Agency” focused on searching, negotiating and buying property in Australia for home buyers and investors. Our goal for each client is the “right property, at the right price, every time”.

We help you:

• Create a clear strategy and realistic “buyers brief”
• Provide access to “off market listings” – properties that are not advertised
• Provide research on the best suburbs with good prospects for capital growth and yield
• Save time – Typically we find the ideal property within 30 to 60 days of engagement
• Negotiate the lowest possible price (ie protect your clients from paying too much!)
• Give accurate appraisals and excellent local knowledge, Propertybuyer is currently the most awarded Buyers’ Agency in Australia, with 37 Awards for Excellence.

We never sell property so we are truly independent – we are not paid by selling agents or developers, so we never have a conflict of interest. This means we can devote ourselves wholly to looking after your best interests.

Plenitude Wealth is a holistic wealth management firm that is dedicated to making a positive change to the financial landscape of Australia and ultimately the world through creating an educational foundation of social awareness, enterprise and social consciousness.

We are passionate about all things property! This passion is about so much more than just property investments, numbers, and spreadsheets, it is about the relationships and genuine care we build with our clients.

We are exceptionally privileged when we are asked to assist our clients to help grow their investment property portfolios or even kick start their first purchase. Unlike most Buyers Agents, we are selective about our clients and do not try and do as many sales as possible – the emphasis is always on quality over quantity!

Our goal is not only to find the ultimate solution for them but to do so in a manner that ensures continued success by choosing locations primed for capital growth and the right cash flow for our client’s goals.

Optalife Wealth works with you to build financial security by providing clarity and confidence about your future. We work with you to build your financial plan, clearly defining what your future looks like and laying out clear and understandable steps for you to achieve.

There is no one size fits all here. We design your plan like a financial roadmap, tailored to your specific situation and what living your optimal life means to you. Like anything in life, having a clear plan increases the likelihood success and having a whole team working alongside you makes reaching your dreams one step closer.

Financebetter is here to guide you through the complexities of the financial world. Our experienced team of experts, including accountants, financial advisors, and investment analysts, is dedicated to delivering exceptional service and results.

Our comprehensive solutions and personalized guidance empower you to achieve your financial goals. Partner with us and experience the Financebetter advantage on your journey to success.

Bond Conveyancing is a licensed Law Firm designed to remove the stress out of buying or selling property in a simple, secure and affordable way. Bond Conveyancing is technology enabled but always people first.

Bond Conveyancing consists of an experienced team of conveyancers and lawyers qualified and skilled in property settlements and transfers. But they are not just about the property. Bond Conveyancing is people first, always. We understand that this is a big moment in your life and our timeliness and effectiveness in communicating with you comes second only to our diligence in ensuring your property settlement goes as smoothly as possible.

Our service puts a fully licenced Buyer’s Agent and Qualified Property Investment Adviser right at your side, to ensure that your interests are being protected at all times and your next investment property purchase achieves maximum success. Leverage off our extensive experience, professional know-how, and independent research to ensure that you’re accessing the best property opportunities available Australia-wide.Buying Properties in Sydney / Melbourne / Brisbane / Adelaide we operate on a client first approach, and will never sell you any property. We are 100% fee for service, providing independent & unbiased advice from qualified advisers and Buyer’s Agents. We set the standard in providing exclusive, one-on-one, independent, trusted and expert advice, tailored individually to suit your particular needs.

Subscribe to our newsletter today and receive a FREE copy of How To Identify Hotspots