Housing Prices Sydney, Melbourne: Rents in cities rise as regions languish

Since the pandemic first hit Australia’s shores in early 2020, people in different states and regions of the country have faced different outcomes. From border closures to localized lockdowns, zip codes and geographies can define who we are.

But even as the direct effects of the pandemic begin to fade from our lives, its legacy, and the changes in our way of life it has caused, continue to impact outcomes across the country.

One place where the results are very diverse is in the different contexts of the country. rental marketWhile rents have fallen in some markets, they are still rising very rapidly in others.But even in individuals city ​​or regionthe results can be very different when comparing unit and residential rent growth.

Unexpected rental crisis…

For almost two years, Australia’s borders have been largely closed to international arrivals, posing the greatest adversity from abroad. net migration Since World War I.

At first glance, this would have resulted in an ample supply of housing for both new homeowners and renters, even though a record number of homes were being built during this time. and supply issues.

But in the end the exact opposite happened. Real estate data his provider, Louis Christopher, managing director of SQM Research, said:

There is a long list of reasons and theories as to why this happened. in a recent articleThis includes a decline in shared housing and changes in internal migration patterns.

These factors are also exacerbated by delays in the completion of new homes.

More than 188,000 new homes were built across the country in the last quarter, which was not affected by the pandemic. As of the end of his March quarter of this year (latest data available now), there are currently 240,000 new homes under construction.

The 52,000 homes currently under construction are up from pre-COVID-19, and a significant proportion of these households say they are looking for alternative accommodation while waiting for their homes to be completed. expected.

This is adding to the stress on an already struggling rental market under the pressure of pandemic change and rapidly increasing immigration.

forking road

Nationwide, home rents rose 4.3% in the September quarter, up 10.3% over the past 12 months, according to housing data provider PropTrack.

However, it is here that the various rental markets, homes and units all begin to diverge. For housing across the region’s rental market, for example, September quarter rents were flat or down in all states and territories except Western Australia.

At the other end of the spectrum, unit rents in Melbourne and Sydney rose 5% and 4% respectively in the September quarter. Rents in Sydney and Melbourne are likely to continue to rise as her two largest cities in the US are prime destinations for new immigrants and international students.

In the March quarter, the country hit a record quarterly net international migration, according to Australian Bureau of Statistics (ABS) figures.

The Albanian government plans to increase the intake of inhumane permanent migrants to a record 195,000 a year, which could keep pressure on rents in areas popular with new arrivals. .

As you can see, the issue of rent growth is a very different issue, with price pressures surging in some markets and still significantly higher in others. This puts rental market participants in very different positions depending on the location and whether they are looking for a house or unit.

In some cases, such as elements of the Sydney and Melbourne unit markets, landlords will almost certainly continue to hold all the cards when it comes to further rent increases.

In other rental markets, such as some rural housing markets, much of the leverage held by landlords has evaporated, as evidenced by flat or falling rents in rural rental markets in the September quarter.

Some Australians can afford to pay more rent if they want, but in some markets tenants are already at or seem to be at their limits. Like, ‘you can’t draw blood from a stone’ or in this case higher rents from area tenants who can’t afford to pay.

Tarric Brooker is a freelance journalist and social commentator. @AvidCommentator

Housing Prices Sydney, Melbourne: Rents in cities rise as regions languish

Source link Housing Prices Sydney, Melbourne: Rents in cities rise as regions languish

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