Australia finds itself in an undesirably uncertain position where they are experiencing a period of very low rental vacancy rates and rising rent levels, according to City Removalist. The very low vacancy rate has been constant for the vast majority of 2022, a situation not seen for over two decades.
This has an adverse effect on the housing market as it forces pressure on rents to rise, and as a result are at the highest, they have ever been.
City Removalist has been an industry leader for over 20 years with the Removalists Interstate Sydney earning a well-deserved reputation as one of the best removalist companies in the business.
History of Rising Prices
The rental housing market in Sydney, Australia is facing significant challenges. Homeownership rates have been declining for years and rental costs are rising out of reach for many people.
The median rent for a 3-bedroom property in Sydney is still increased by approx 10% each year. The current weekly average rent is $530.
This situation has been exacerbated by the tight supply of houses available to rent, with vacancy rates currently standing at 0.2%. This was the lowest in Australia for 2022.
This situation is particularly concerning given that Sydney’s population continues to grow at an unprecedented rate, as more and more people flock to the city in search of employment opportunities.
A recent report from Renters United states that around one third of all households in greater Sydney are now renting, with this figure expected to increase over the coming years.
Many tenants face uncertain situations due to high rents, long-term leases and limited options when it comes to finding suitable accommodation.
Why do we have a rental crisis?
According to the company, with rising migration into Sydney, it certainly poses a major challenge for the inner-city rental market over the next year given the low supply of available housing.
As many landlords who had owned inner-city apartments have then sold them during the pandemic and the supply of rentals remains much lower than before the pandemic.
This crisis of rental housing is the consequence of several causes and will require a variety of solutions.
1. Not enough homes being built.
City Removalist strongly believe that there are not enough homes to keep up with population and household growth. One reason for the increased number of new households in part caused by relationship breakdowns and share houses dissolving due to COVID lockdowns.
They understand that to reduce the rental crisis the building industry needs to build more well-located rental dwellings in geographical areas that are affordable to people with low incomes.
We also believes that builders must be incentivized, if the state and federal government can work together to offer subsidies to builders, this could substantially offset some of the cost burdens associated with the construction of new dwellings.
2. Rise in Building Costs
City Removalist firmly believes that the rise in costs and the unprecedented number of building companies that have gone into administration have had a significant impact on the number of homes not being built.
Furthermore, the number of people looking to build homes is on the decline since there is a weakening in confidence in the building industry.
The company firmly believe that lowering of interest rates will help curb rising prices and may tempt developers back into the real estate market, but in times of high inflation, investors usually become risk averse.
3. Rental Assistance
There is a lack of rental assistance when it comes to renting as a lot of the federal budget is afforded to Job Seeker recipients and other social welfare programs.
City removalist advocate that there be government assistance though, there are limitations in that ‘the Australian Government is empowered to make certain social security payments only, which do not include rent or other housing payments. If the federal and state governments work together making grants a priority to the states and territories for rent assistance to eligible persons will improve rental affordability across the board.
It has been a turbulent year for more reasons than mentioned above, the culmination of inflation, post pandemic and rising interest rates would be at the forefront of the reasons there has been such a short supply of affordable rentals properties, and in return reducing the Interstate Removalists Sydney market
The company have turned the spotlight on an issue that has no easy or fast solutions, but rather a sustained effort by the government and private sector to collectively come together and propose a long-term plan for sustainable development and rental assistance moving forward.
About City Removalist
City Removalist is a Sydney-based removals company offering quality, reliable services to the city and its neighbourhoods. Established in 2000, City Removalist has become a trusted provider of house and office removals with professional staff who guarantee their work.
The company offers a full range of services to make moving as hassle-free as possible. This includes packing and unpacking services, furniture dismantling/assembly, loading/unloading service and more.
All staff are fully insured professionals knowledgeable in the safe handling of your personal possessions. They also provide support for specialised moves such as piano relocations or bulky items that require extra care when moving.
Sources: THX News, Mozo, AHM & City Removalist.