The Australian residential property market is the section of the Australian property market that provides rental properties by landlords to tenants. In Australia 31% of households rent their residences.[1] The vast majority rent from private landlords, and a small minority rent from public housing authorities. Over the last three decades the proportion of Australians in public housing has halved, whilst the amount renting privately has grown.[1][2] The average weekly price for a rental in Australia is $570 AUD.[3] Sydney has the most expensive capital city rents.[4] Rental rates have increased faster than inflation in recent years.[3][5]
In recent years, the cost of Australian rentals has become a prominent political issue; dubbed the 'rental crisis'. Demand remains high while supply is low.[4] Some have advocated supply-side reforms to address the crisis, such as reforms to construction approvals,[6] others for price controls,[7] and others for demand-side reforms like immigration restrictions. The actions of Australia's major parties on the issue have been widely criticised as inadequate,[8] though praised by some.[9]
Renting
editAround one third of Australia's 9.8 million households pay rent for their residences. The other two thirds are owner-occupiers, half of whom have a mortgage.[1][2][Note 1] Of the households that rent, ~83% rent from private landlords, while less than 10% rent from public housing authorities.[2][Note 2] The proportion of households from a public housing authority has approximately halved since 1995, while the proportion renting from a private landlord has increased by over ~40%.[2]
Immigrants overwhelmingly settle in Sydney and Melbourne, exacerbating the shortage of supply in those cities.[10]
Rental prices
editThe average weekly price for a rental in Australia is $570 per week. Units are typically cheaper, at a national median of $540 vis-a-vis houses at $582.[3] Rental prices grew nationally by 10.1% between 2022 and 2023; substantially higher than the annualised CPI rate of 7% for the period.[3][5] Vacancy rates are historically quite low, at around 1%; a rate some argue is indicative of upward price pressure.[11]
Median rents across Australian cities as of Q1 2023 is as follows:[3]
| Region | Median Rent (per week) | Gross yields[Note 3] | Vacancy rates[Note 4] |
|---|---|---|---|
| Sydney | $699 | 3.22% | 1.2% |
| Melbourne | $526 | 3.4% | 0.7% |
| Brisbane | $599 | 4.34% | 1.1% |
| Adelaide | $531 | 4.09% | 0.3% |
| Perth | $572 | 4.85% | 0.6% |
| Hobart | $563 | 4.39% | 1.7% |
| Darwin | $588 | 6.39% | 1.8% |
| Canberra | $674 | 4.19% | 2.0% |
| National | $570 | 3.9% | 1.2% |
Australian rental crisis
editRental availability and affordability has become a prominent issue in Australian Politics recently, with the topic being the subject of substantial media coverage and political debate.[12][13][14][15] Media reports have included coverage of low income households being unable to find suitable accommodation and forced into homelessness.[16][17] Some suburbs in Australia saw rent increase between 30-40% from 2020 to 2022;[17] with Bellingen on the NSW coast experiencing an annual rent increase of 48%.[18] In September 2023, the national vacancy rate declined to 1.1%.[19]
Reasons provided for the crisis vary, with some blaming failures in residential construction processes at the council level,[20] a lack of public housing construction,[21] vacant residences,[22] increases in short-stay accommodation[23] or demand factors like immigration.[12] Reductions in average household size during the Covid-19 pandemic have also been pointed for driving a demand squeeze. The pandemic has prompted a desire for more space and to live with fewer people.[24]
Solutions proposed to address Australia's rental crisis also vary. Some economists have proposed reforms to residential construction approval process,[6] while others (most notably the Australian Greens) have proposed an introduction of rent controls.[7] Major parties proposals at a national level to address the issue have included a scheme proposed by the ALP called the 'social housing fund',[25] whilst The Coalition has promoted assistance schemes to increase rates of home-ownership. The responses of Australia's major parties have been criticised as inadequate.[26][8][27]
See also
edit
Notes
edit- ^ The most recent housing statistics available are from the 2021 ABS census, a survey conducted every five years.
- ^ The remainder rent from landlords that are neither private landlords, nor state or territory housing authorities; such as Commonwealth housing authorities like Defence housing
- ^ Gross yields are calculated by dividing the annual weekly rent of a property by its purchase price. (i.e. [annual rent] / [property price] = [gross yield]). Net yields, which take into account aggregate financing, maintenance, tax, or other costs, are usually much lower
- ^ Vacancy rates are calculated by dividing the number of properties vacant for any reason by the total number of properties. Reasons for vacancy may include: disrepair, vacancy prior to sale or construction, renovations, etcetera
References
edit- ^ a b c "Housing Occupancy and Costs". Australian Bureau of Statistics. 25 May 2022. Retrieved 19 September 2022.
- ^ a b c d "Home ownership and housing tenure". Australian Institute of Health and Welfare. 5 April 2023. Retrieved 2023-05-08.
- ^ a b c d e Corelogic Quarterly Rental Review (Australia) (Report). 1 April 2023. Archived from the original on 8 May 2023. Retrieved 8 May 2023.
- ^ a b Ainsworth, Kate; Pupazzoni, Rachel (6 July 2023). "National rental prices rise by 2.5 per cent as market battles high migration-led demand and housing supply shortages". ABC News. Australian Broadcasting Corporation. Retrieved 6 July 2023.
- ^ a b "Consumer Price Index, Australia, March Quarter 2023 | Australian Bureau of Statistics". www.abs.gov.au. 2023-04-26. Retrieved 2023-05-08.
- ^ a b "Sydney's rich are locking out the rest of us". Australian Financial Review. 2023-03-09. Retrieved 2023-05-08.
- ^ a b Rose, Tamsin (2023-02-06). "Greens vow action as huge rent hikes see adults forced to move back in with parents". The Guardian. ISSN 0261-3077. Retrieved 2023-05-08.
- ^ a b "With high prices and soaring rents, what are political parties promising to do about housing?". ABC News. 2022-05-08. Retrieved 2023-05-08.
- ^ Quiggin, John (11 January 2022). "Labor's proposed $10 billion social housing fund isn't big as it seems, but it could work". The Conversation. Retrieved 2023-05-08.
- ^ Sakzewski, Emily (19 January 2023). "Australia's rental market will only get tighter in 2023. Could more property investors be the answer?". ABC News. Australian Broadcasting Corporation. Retrieved 17 May 2023.
- ^ Taylor, Josh (14 July 2022). "'A landlord's market': rents hit record highs across Australia's capital cities". The Guardian. Retrieved 22 September 2022.
- ^ a b "Record immigration, nowhere to live. Welcome to Australia's rent crisis". Australian Financial Review. 2023-04-05. Retrieved 2023-05-08.
- ^ "Australia's rental crisis hits women particularly hard". 9now.nine.com.au. Retrieved 2023-05-08.
- ^ "Here's who is being hit hardest by Australia's rental crisis". SBS News. Retrieved 2023-05-08.
- ^ Kohler, Alan (2023-04-12). "Answer to rental crisis is not easy, but necessary". The New Daily. Retrieved 2023-05-08.
- ^ "What's causing the national rental crisis?". National Seniors Australia. 12 May 2022. Retrieved 22 September 2022.
- ^ a b "Australia's runaway rents". ABC News. Australian Broadcasting Corporation. 21 September 2022. Retrieved 22 September 2022.
- ^ Four Corners (3 October 2022). "Kaila was forced to live in a motel with her two kids. The rental crisis made her homeless". Australian Broadcasting Corporation. Retrieved 4 October 2022.
- ^ Ainsworth, Kate (30 October 2023). "Renters face tougher market with number of listings at record low as demand grows but supply dwindles". ABC News. Retrieved 30 October 2023.
- ^ Wright, Shane (2022-07-22). "Give councils cash to help bring down housing prices: think tank". The Sydney Morning Herald. Retrieved 2023-05-08.
- ^ Rolfe, Brooke (8 August 2022). "Real cause of Australia's dire rental crisis revealed". news.com.au. Retrieved 22 September 2022.
- ^ "Do 1,043,776 empty houses hold the answer to the rental crisis?". ABC News. 2022-09-01. Retrieved 2023-05-08.
- ^ Nallay, Alicia (24 June 2022). "How Australia is dealing with Airbnb, Stayz in a housing crisis". ABC News. Australian Broadcasting Corporation. Retrieved 22 September 2022.
- ^ Hanmer, Fred; Marquardt, Michelle (24 April 2023). "New insights into the rental market". Australian Bureau of Statistics. Retrieved 17 May 2023.
- ^ Quiggin, John (11 January 2022). "Labor's proposed $10 billion social housing fund isn't big as it seems, but it could work". The Conversation. Retrieved 2023-05-08.
- ^ "Are we on the cusp of another property boom as NSW heads to the polls?". ABC News. 2023-03-24. Retrieved 2023-05-08.
- ^ Martin, Sarah (2022-05-03). "What are the differences between the major parties' homebuying policies this election?". The Guardian. ISSN 0261-3077. Retrieved 2023-05-08.