CoreLogic's head of residential research Eliza Owen says in this "landlord's market", requests for homelessness services have been increasing every year since 2012. "The rental system has to change," she says.
For more than 15 years, CoreLogic's estimates of median rent values in Australia had been trundling along at a relatively slow pace, growing by, on average, 2 per cent a year in the 2010s. In fact, in the past two and a half years median rent values have risen by as much as they did in the entire 13 and a half before that.
"Lower income households are more likely to be in the private rental market [and] they're seeing much higher levels of incomes required to service rents," Owen says.Rental properties are less affordable in regional areas than in the capital cities, and regional areas have seen some of the biggest price spikes.
That rejigging and splitting up of homes created new demand equivalent to about 70 per cent of the homes that were completed in Australia in 2022, according to dwelling completion data from the Australian Bureau of Statistics. Then a surge of new residents entering Australia once border closures were lifted in 2022 created even more demand.
“We had 40 groups inspecting, obviously that can only go to one group, and it’s hard to see 39 groups not get approved," Lofitis says. "We started to see investors dropping out of the market quite heavily and that was in response to changes in lending conditions because the mortgage market was being exposed to more risk," Owen says.
"There's a lot in the construction pipeline right now but when that's complete, I think you're facing a bit of a vacuum of new projects for 2024." Analysts, renters and real estate agents agree that a change in the makeup of the rental market has meant we've lost some of the cushioning we once had for these kinds of shocks.The other big owners of rental properties are governments, but those homes are a shrinking slice of the market.
"We need to stop being so reliant on just mum and dad investors to supply the rental stock," he says. The argument is that social housing has historically been a safety net for low-income people, helping reduce the impact of housing market fluctuations on those most vulnerable to them — but that net now has some gaping holes.
Patterson Ross says Australia should aim to reach a point where public housing makes up at least 10 per cent of all housing stock. Recently, the Greens have seized on the growing discontent and have launched a push for increased renters' rights, including a freeze on rental increases.Prime Minister Anthony Albanese says a "better deal for renters" is on the wayThe national cabinet also pledged to move to nationally consistent rules requiring reasonable grounds for eviction, limits on rent increases to once per year, and a phasing in of minimal rental standards.
"We have had generations of family investors supplying affordable rental accommodation for Australians for an awfully long time now," Hayden Groves says.