In my latest surveys we showed that cash flow stress among households has risen to an all time high of 73.47% or more than 2.27 million households.
Mapping the Market data from CoreLogic shows the high proportion of areas where house rents have risen by 20% or more across Sydney, and Melbourne, those here, some areas especially to the east of the city did not follow suite. House rents in Brisbane showed more diversity, though central Brisbane saw consider considerable hikes. Adelaide and Perth also had many hot spot areas across house rentals, with some areas to the east of both CBD’s reporting slower growth rates over the past year.
That said, Canberra and Hobart bucked the trend with little or no growth – of course there are rents controls in the ACT which helps to moderate rents.
All this means that for many renters the ability to house themselves has become even more expensive, and this of course flows through into the inflation data with all rents – not just new rents running close to 10% annualised. It’s a real mess, and leading to real social consequences.
Then again, there are some winners as according to data from SQM Research residential landlords in some inner-city and middle ring suburbs pocketed up to $56,000 extra rental income in the past 12 months as rents hit record highs across the major capital cities.
A critical factor here is that some landlords, sitting on strong capital gains, are looking to crystalize their paper profits so have listed their rental property for sale, a trend we see most strongly in Melbourne, but it is spreading elsewhere. In addition, higher rents are not enough to cover the increased mortgage costs, even after negative gearing, so the supply on rental property is on the decline at a time when migration continues to run hot.
The Rental Market Is Broken but do those in political circles want to tackle this critical issue? Lip-service apart, I suspect not. So to that extent, Australia in broken too.
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