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.
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual
The construction sector is roaring back to life in some Australian states while others languish in the doldrums
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The home building market is on the rebound as building approvals rise, new data reveals.
Information from the Australian Bureau of Statistics shows that the total number of dwellings approved in August was up 7 percent seasonally adjusted, with apartments leading the way.
Private sector house approvals gained 5.8 percent in August while private sector residences excluding houses were up 9.4 percent. This follows on from a decrease of 14.6 percent in July and indicates a solid recovery in the Australian construction sector as the end of the year approaches.
Approvals for total dwellings were strongest in the two largest states, with Victoria recording a rise of 22.2 percent and NSW 12.5 percent. Western Australia also saw a significant rise of 12.3 percent.
In Queensland, the results were less positive for the sector, with total dwelling approvals falling by -26.9 percent. Tasmania also experienced a drop in approvals in August, down -10.1 percent and South Australia -6.9 percent.
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual
