Will We See Rental Relief in 2023?
A year and a half ago, we were confronted with COVID-19, closed borders, and halted immigration. As a result, rental vacancies were high and rental prices dropped.
Now there are concerning news stories of skyrocketing rental prices and Australians scrambling to find a roof to put over their heads.
So, why is the rental market in Australia so tight?
Population growth
One of the key factors driving the tight rental market in Australia is population growth. Australia has experienced steady population growth over the past few decades, with many new residents choosing to settle in major cities such as Sydney, Melbourne, and Brisbane. This has put pressure on the rental market, as more people are competing for the same properties.
Declining rates of homeownership
Another factor contributing to the tight rental market is the increasing demand for rental properties. This is partly due to changing demographics, such as an aging population and more young people delaying homeownership. Additionally, many people are choosing to rent rather than buy due to the high cost of buying a house.
Lack of construction
Lack of new construction also plays a part. While there has been some new development in recent years, it has not kept pace with demand. This has led to a situation where there are simply not enough rental properties to meet the needs of all renters.
Understandably, this has left many anxious renters wondering if things will get better. What can we expect in 2023?
Over the next six to 12 months, there is an expectation that building activity will ramp up in response to the high demand for rental properties in Australia. This is likely to ease some of the pressures that have been building in the rental market due to the housing shortage.
For investors, now could be the ideal time to jump in.
With a resurgence in construction and a number of state and federal government initiatives including the Big Housing Build and First Home Guarantee Scheme, investors can take advantage of this opportune time to purchase properties at reasonable prices.
While there is still some way to go before the rental market returns to a more balanced state, the combination of increased building activity and government incentives is a positive sign for renters and investors alike.
