No immediate solution to the rental housing shortage, but taking appropriate steps is crucial
- Posted By Ndl 1 Realty
With rental demand high, rental stock low, and rental prices on the rise, the rental crisis is reaching a critical point in many areas across the country. What actions can be taken to address this situation?
Rents have risen well above most tenants' budgets, with some reporting a 30% increase in rent.
Based on PropTrack's latest Rental Report, the average advertised rental price was $480 per week at the end of 2022. Compared to last year, national rents rose by 6.7% in 2022. Tenant's living conditions are expected to worsen before improving, prompting experts to call for immediate action to improve housing conditions for everyone.
A simple solution to the rental crunch isn't to build more homes but to build homes aimed at tenants in the most desperate situations.
Andy Fergus, a rental market expert, says there's more to building for the rental market than people realise.
"I think something that's so important to think about is the targeted areas of the rental crisis and the price points that we want to be able to achieve," he said.
Instead of relying solely on constructing more housing at maximum market prices to address affordability concerns, we should focus on identifying and utilizing targeted strategies that address the needs of those experiencing rental stress or having limited access to housing.
In addition to more targeted homes being built, government incentives must also be more enticing.
Mike Mortlock, the managing director at MCG Quantity Surveyors, stated that while incentivising new construction through grants has been successful in the past, it should be expanded to include new homebuyers and investors.
The development of build-to-rent properties also contributes to the supply of rental properties in the market.
Building to rent, as seen in the recent example of Home in Richmond, Southbank, and Docklands, allows tenants to avoid the competition in a traditional market and to have more flexibility in tenancy terms.
As the housing supply booms in Australia, the Labor Party has vowed to build more affordable and social housing, including the $10 billion Housing Australia Future Fund, which will build 30,000 houses a year.
The initiatives, however, have failed to help many renters who need help.
Mr. Fergus pointed out a significant gap in the housing market, where moderate-income earners are struggling to find suitable rental housing. He suggested that there is a need for innovative solutions to introduce new models of rental housing to address this issue.
"Government could support pilot projects in new forms of non-profits, or even cooperative rental housing is a really interesting model that I know federal and state governments are looking into at the moment. That could really take off."
According to Leo Patterson Ross, CEO of the Tenants Union of NSW, a record number of frustrated renters are set to vote in the upcoming elections.
According to him, the upcoming NSW election in 2023 will be focused on renters' issues. The resolution of renters' problems could be a significant deciding factor for voters, and all political parties need to discuss their plans for addressing the rental housing crisis.
A share house or renting out a room within their property is not ideal for every tenant, but it can be a good way to weather the rising costs.
"With the rising cost of living, population growth, and the lack of property supply, sharing will become more popular," said Flatmates community manager Claudia Conley.
Choosing to share accommodation with others is often a more economical option than renting a property individually. Some individuals may opt for shared accommodation to keep their expenses within their budget. In contrast, others may have to consider it due to the fierce competition in the rental market, making it difficult for them to afford living alone.
According to Ms. Conley, the rise in demand for shared accommodation is causing an increase in prices. This trend is evident in every state, as there has been a surge in demand for shared accommodation.