Australia’s Housing Crisis: Rental Market in Peril as Apartment Shortage Looms - Property Inc

Australia’s Housing Crisis: Rental Market in Peril as Apartment Shortage Looms

Australia’s housing rental market is spiraling into a worsening crisis, with a severe real estate shortage causing rents to skyrocket and pushing thousands into homelessness. In a report by The Straits Times, it’s revealed that less than 1% of Australia’s rental properties are currently available, a situation more extreme than in bustling markets such as Singapore.

A major contributor to the problem is the reluctance in building new homes. Adelaide Timbrell, senior economist at Australia & New Zealand Banking Group, highlighted, “Demand has never really been hotter, and people supplying property have never been more hesitant. What makes this cycle different is that people don’t want to build homes.” The building crisis is evident as 560 construction firms filed for insolvency in merely two months, and the level of new building approvals is near an all-time low when adjusted for population.

Adding to the crisis, a separate report by Gerv Tacadena indicates that Australia is on the verge of an apartment shortage. Kaytlin Ezzy, an economist at CoreLogic, noted that approvals data from the Australian Bureau of Statistics (ABS) unveiled a declining trend in the unit sector, with July seeing a 19.9% decrease from the prior month and being 39.8% below the decade average.

The situation in Sydney is particularly alarming. Rents for houses have surged by 16% over the past year, and apartments have witnessed a 20% increase. Maryam Yaqoob, a 28-year-old engineer, expressed the challenges she faced, “I had no idea that it would be so hard for us, because ours is a double-income household. Wherever we went there were long queues – 50 people were lining up to see one unit and the prices were too high.”

While efforts are being made at both state and federal levels to address the housing shortage, any significant results might take time. The A$10 billion Housing Australia Future Fund aims to construct 30,000 new social and affordable homes in the next five years. However, many Australians are still grappling with the challenges posed by the current crisis, with full-time workers resorting to living in tents and caravan parks.

The need for new housing is evident, but the path to achieving this remains riddled with challenges. As Rose Jackson, the state’s minister for housing, aptly put it, “There is no silver bullet when it comes to addressing our housing crisis.”

References:

‘Vicious spiral’ drags Australia housing rental market into deepening crisis. The Straits Times. ↩ https://www.straitstimes.com/business/vicious-spiral-drags-australia-housing-rental-market-into-deepening-crisis 

Australia’s housing on a brink of an apartment shortage. Gerv Tacadena. ↩ https://www.yourmortgage.com.au/mortgage-news/unit-shortage-looms-over-housing-market 

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