A warning has been issued to Australian renters ahead of the opening of international borders, with the group expected to face the same issue plaguing home buyers.
Experts are expecting rental prices to rise dramatically as Australia’s international borders reopen.
With tenants warned to start preparing for higher housing costs, 22 out of 30 economists and property experts from the latest Finder RBA Cash Rate Survey say they expect rental prices to rise significantly in 2022.
“The pandemic turned the rental market on its head in some areas with increased vacancy rates in major capital cities such as Sydney and Melbourne,” said Graham Cooke, Finder’s head of consumer research.
He told news.com.au that there was a drop in demand for rentals as Australian students moved home during the lockdown last year or international students went abroad, but the market was recovering now.
“There has been a huge increase in investor loans and I would say that is driven by a lot of people thinking that the rental market looks safer than it was last year,” Cook said. “All indications are that this trend will continue.”
As international students and backpackers return to our shores, demand for fares is expected to return quickly.
“The influx of new tenants in the interiors of the city and university areas will further fuel the demand,” he said.
A quarterly report released in October by property analysis firm CoreLogic showed that rental prices nationally were they are the highest In 13 years.
National rental rates were up 8.9 percent year-on-year compared to the same period last year, the highest annual increase in housing rents since July 2008.
The report showed that Canberra’s rental rates were among the most expensive in the country, with the average rent being $633 per week. Adelaide’s cheapest was $440 a week.
Sydney came in at $595, Melbourne $450, Brisbane at $491, Perth at $478, Hobart at $507 and Darwin at $561.
Regional Australia’s annual rate of rental growth of 12.5 percent in September was the highest annual figure on record, with data from the CoreLogic Rental Index dating back to 2005.
“Relative to household income, based on data for March, Melbourne was actually the most affordable capital city to rent, with homes, on average, giving 26 per cent of its gross annual household income a housing rent compared to the national average of 28.7. percent,” CoreLogic research director Tim Lawless said in October.
“Melbourne has been showing the greatest risk to foreign migration, at least historically, once international borders open up we may see a higher growth in rental demand than other cities.
“If that’s the case, we could see Melbourne registering a faster rate of rental growth once again.”