Heat is on Australian rental markets as would-be buyers opt out
New data reveals rents are accounting for greater percentages of household incomes
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Pressure on Australia’s rental market continues to mount, with rental affordability at its highest level in almost a decade, new research has found.
The ANZ CoreLogic Housing Affordability Report has revealed that rent now accounts for almost a third of household income for a median income household, the highest level since June 2014. The situation for lower income households is even more stressed with those at the 25th percentile income level spending 51.6 percent of their earnings on rent.
Sydney topped the list of least affordable places in the country with on average 51.6 percent of income going to service a new mortgage, while it would take 12 years to save for a 20 percent deposit. The result is more would-be homebuyers are being pushed out of the housing market and into rentals.
The report also found that rental vacancy rates are at 1.1 percent nationally, down from a decade average of 3 percent.
CoreLogic Australia head of research Eliza Owen said there was no relief in sight for renters anytime soon as the construction industry felt the impact of interest rate rises.
“As rents have risen sharply, the increase in the cash rate, and pressures in the construction sector have slowed the rate of dwelling completions. This has meant investor conditions are not ideal, and has stemmed the flow of new rental properties to the market,” Ms Owen said.
“Through February and March ABS lending data has shown signs of an increase in investment borrowing, but it will take some time for a supply response to ease pressures in the rental market.”
ANZ senior economist Felicity Emmett said uncertain conditions had also impacted on the amount of existing housing stock going to market.
“Heightened economic uncertainty has seen a decline in sales volumes in the private market and an increase in those seeking rental accommodation. Paired with a decline in social housing, rental demand pressures are being felt in all income brackets,” Ms Emmett said.
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A Sydney waterfront mansion that has just hit the market could set a countrywide price record as the first home to sell for A$200 million (US$129.77 million).
Located in the affluent suburb of Point Piper, the sprawling home sits on a lot that’s equivalent to “four normal housing blocks” and features 98 meters (321.5 feet) of water frontage along the harbor, according to an announcement on Wednesday from Ken Jacobs, director of Australia Pacific of Forbes Global Properties, who has the listing in association with real estate agent Brad Pillinger.
“The estate is Australia’s most iconic residence and ranks amongst the best in the world, combining both privacy and space, exuding elegance and comfort, while featuring gun-barrel views of the Sydney Opera House and the Harbour Bridge,” Jacobs said in a statement.
The residence is expected to sell for A$200 million or more, Pillinger added. “There is no comparable property in Australia.”
The home, named Wingadal, as it’s located on Wingadal Place, was built for Aussie Home Loans founder John Symond, who purchased the property in 1999. It took eight years to complete the mansion, which was designed by architect Alec Tzannes, according to the listing agency.
“Wingadal is a highlight of my career in residential design and architecture,” Tzannes said. “The timeless design on the Point Piper peninsula offers a unique appreciation of Sydney Harbour from a variety of angles, rotating around an axis that lines up perfectly with the Sydney Harbour Bridge.”
The colossal home has enough internal space to entertain up to 500 people, and underground parking provides space for 20 cars, plus eight more can fit inside the garage.
The four-level home has four bedrooms as well as a two-bedroom apartment. There’s also a 2,500-bottle wine cellar, a home theater that seats 22, two commercial kitchens and a swimming pool.
“Wingadal has been a special home for my family over the past two decades, and now I’m looking forward to spending more time traveling overseas,” Symond said in a statement. “While being an exceptional family home, we have also enjoyed hosting many important events for charities and other worthwhile causes.”
This is not the first time Symond has tried to sell his waterfront estate. In 2016, he listed the home in hopes of selling it for at least A$100 million, which would’ve been a price record for the country at that time Mansion Global reported . The current benchmark was set in 2022, when a baronial-style estate, also in Point Piper, sold for A$130 million, according to The Sydney Morning Herald .
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