The return of international students and new immigration figures are likely to put further pressure on rents, which are already rising at a rapid rate, property experts say.
Renters are facing a perfect storm of chronic shortages, particularly of units, due to a lack of construction and real estate investors switching from the long-term rental market to short-term vacation rentals.
Louis Christopher, founder of SQM Research, suspects that the rental shortage is forcing many younger renters to move back into single-family homes, move away from cities where rents are cheaper, or share their rental accommodation with more people, in an attempt to combat the rise in what is the largest cost of living expense for most people.
However, those who have no choice but to stay in rental accommodation find themselves in a difficult situation, he says. “I expect strong rent increases through the end of this year, at least.”
Unit rentals in Melbourne soared 12.9 per cent over the 12 months to August 31, while unit rentals in Sydney increased 11.6 per cent in the same period, figures from Corelogic show. .
Sydney home rentals rose 9.8 per cent, while Melbourne home rentals rose 5.7 per cent.
Rents in some local government areas (LGAs) have increased more than these averages, particularly in inner cities.
Corelogic data provided to the Years Y Sydney’s morning herald show rentals at the Melbourne LGA rose 34 per cent in the 12 months to August 31.
Unit rents at the Sydney LGA and Botany LGA increased by an average of 17 per cent each.