Renters are feeling more hurt than ever as housing unaffordability and low availability contribute to “unprecedented” stress.
Renters in almost half of all Australian suburbs are in extreme pain, as quantified by property research group Suburbtrends.
In its Rental Pain Index for January — which factors in a suburb’s rent change, advertised rentals, vacancy rates, vacancy change and rental affordability — 12 suburbs have a maximum score of 100.
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The worst affected included Durack and Logan Central in Queensland, and Warilla and Sans Souci in NSW.
Queensland and South Australia are experiencing the highest levels of rental hardship, with 58 per cent of suburbs in both experiencing a score greater than 75.
“Our January report shows an unprecedented level of rental stress,” Suburbtrends founder Kent Lardner said.
Rather than being an isolated issue, rental unaffordability was a nationwide problem that required immediate and comprehensive action, he added.
“The data calls for urgent, multi-faceted policy solutions to address the soaring rental costs and limited housing availability,” he said.
One suggestion is a nationwide cap on rent increases, similar to controls in the ACT where, in 2019, the Labor-Greens introduced limits on landlords increasing prices to 10 per cent above the rental inflation rate, as measured by the Australian Bureau of Statistics.
The territory had the lowest proportion of suburbs in extreme rental pain at 6 per cent, while CoreLogic’s 2023 Property Market Indicator showed rents decreased 1.9 per cent in Canberra compared with an 8.3 per cent rise nationally.
Only Hobart could boast a lower growth rate, with a 3.5 per cent dip.
Despite fears the cap would discourage investors injecting supply into the market, the ACT’s approach seems not to have had a negative effect — it had the equal-highest rental vacancy rate in the country, tied with the Northern Territory at 2.5 per cent, Suburbtrends found.
Renters in almost half of all Australian suburbs are experiencing extreme rental pain. Credit: Getty
CoreLogic head of residential research Eliza Owen said new rental listings in Canberra were pretty much in line with historical averages for 2023 and investors were likely to respond to a variety of factors, including interest rates and the prospect of capital growth.
“The performance of the rental market is actually quite counter to a lot of the narrative that was postulated around landlords fleeing in droves because they couldn’t get the rental increases they wanted,” Owen said.
“If that actually had happened, we probably would have seen upwards rental pressure on the market.”
Australian National University associate professor Ben Phillips said the ACT’s rent controls were unlikely to have any major impact on rents, prices or supply.
“They are likely to reduce the likelihood of the more egregious rent increases that some landlords may push for,” he told AAP.
“ACT dwelling completions remain very strong and have not dropped away like the rest of Australia.”
Nationally, there is no sign of an increase in supply coming to alleviate rental prices soon. New dwelling completions fell more than 10 per cent in the September quarter to 37,116, the ABS revealed on Wednesday.
It was the sector’s weakest quarter in more than a decade and down 21.6 per cent on the same quarter last year, Housing Industry Australia senior economist Tom Devitt said.
Devitt expects fewer than 180,000 new homes will be started in 2024, far below the 240,000 a year required to meet the Albanese government’s target of 1.2 million new dwellings in five years.