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The Rental Affordability Crisis - And What It Means To You

There’s a bunch of reasons why rents are going up again, such as immigration levels restabilizing. The good news is, aspiring investors can take advantage of this market.

Have you noticed rents are starting to go up again? There’s a bunch of reasons why this is. Experts are calling it the ‘rental affordability crisis’, which basically means fewer available rentals and pricier housing. This is complicated by the opening of domestic and international borders, seeing the return of international students, immigrants and overseas Australians all competing for somewhere to call home.

Before I go any further, let me introduce myself. Hi, I’m Oli, your new best friend and property expert, here to empower everyday Australians just like you. I’m passionate about sharing cutting-edge tools, one-on-one training, research and insights so that you can be confident in your property education & wealth journey and, who knows, maybe even own your own home or investment sooner than you thought.

So, where were we? Right, the rental affordability crisis. I know what you’re thinking, it’ll stop soon won’t it? Well, the National Housing Finance and Investment Corporation (NHFIC) recently put together a State of the Nation’s Housing 2021–22 research report; it says rents are likely to rise beyond 2022 as international borders are relaxed, after the rental market recovered faster than expected in 2021-22.

Let’s dig into the details behind what’s happening.

Firstly, rentals have been filling up again after the lull they went through when borders were closed during the pandemic. National vacancy rates are at 1.0%, their lowest in 16 years, and even Melbourne and Sydney – the cities originally most affected by border closures – have experienced falling rates over the last year. This is largely because of landlords deciding to sell their properties instead of lease them, and less-than-normal rates of housing finance approvals for investors.

Secondly, there’s a supply issue, which isn’t helping the situation. Because of uncertainty and weak demand during the pandemic, there were few apartments in projects released over 2020/21, so any future overflow will likely be quickly snapped up by the market. Looking further ahead, NHFIC’s research report projected a whopping 163,400-dwelling shortage between 2025-32, as new households are expected to outnumber housing supply.

You would expect the construction industry to be thriving with all this demand, but there’s snags there too – mostly trouble getting hold of materials and higher prices as a result, with some materials (timber, aluminium, steel – all essential for the construction industry!) climbing by 20-34% in 2021.

The upshot of not enough homes for the country’s population? Greater competition and affordability issues. House prices are skyrocketing across the country (Core Logic has recorded a 20.6% increase over the 12 months to February 2022), pushing some demand into the rental market, where rent values increased by 8.7% in the same 12-month period.

With all these different issues affecting the rental market, and the added impact of open borders, you’re left with rising rental prices across all capital cities.

So, what does this mean for you?

If you’re an aspiring investor, there’s no better time to invest. Not only are you building wealth for you and your family (or future family), but you’re also doing something good for society by providing a rental for someone who needs it.

Let me tell you a little more about me.

As I said, I’m Oli. I’d best describe myself as a knowledgeable mix of friend and guru, here to take the stress and mystery out of your education process and help you build long-term wealth, including learning to turn crises into opportunities.

I’m guided by 70 years of property knowledge and data under my belt (I’m much older than I seem!) I can’t wait to teach you a thing or two and help you on your journey.

Wanna chat now? If you’re ready to kick things off and enter the exciting world of building wealth, start a chat.

Have you noticed rents are starting to go up again? There’s a bunch of reasons why this is, from international borders opening to low vacancy rates and supply issues. The good news is, both aspiring homebuyers and investors can take advantage of this market.

This marketing material and its contents is provided for general information purposes only. No part of this marketing material constitutes any advice (financial, tax or otherwise), recommendation or representation to you as to any decision which you should make. You should not use any part of this marketing material to form the basis of any investment decision made by you. Before making any investment decision, you should take independent advice from a professional adviser which takes into account your individual needs and circumstances. All information, opinions and estimates contained in this marketing material are subject to change without notice. We disclaim to the greatest extent possible all liability whatsoever for any loss howsoever arising directly or indirectly from this marketing material or its contents.


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