SYDNEY, Oct 30 — Australia’s red-hot rental housing market, supercharged by record migration and a chronic supply shortage, could be reaching a breaking point for affordability as tenants grapple with rising costs of living.
With no way to afford stratospheric inner-city prices when her landlord decided to sell the apartment she lived in for 18 years, Weeks and her cat recently downsized from a two-bedroom to a one-bedroom farther from the city centre that costs 22 per cent more.Rent is now one of the country’s biggest drivers of inflation, which at an annual rate of 5.
“We’re already seeing people that are in houses move to units and then the next logical step is if a unit gets too expensive, you go into a share house,” said Cameron Kusher, chief economist at PropTrack under REA Group.Many tenants, particularly in the most expensive city Sydney, have already been priced out of houses. PropTrack data showing house rents nationally were unchanged at A$550 per week, or about A$2,380 per month, in the September quarter.
Prices across Australia’s entire rental stock rose 7.6 per cent in the third quarter from a year ago, the largest increase since 2009, according to official data, and similar to gains seen in the US where rental costs have also surged.