- Rent rises at 20-year high fuelling fears of rental crisis
- The Australian
- 29/01/2009 Make a Comment
- Contributed by: The Rooster ( 258 articles in 2009 )
RENTS have recorded their highest increase since 1988 amid fears the rental crisis will only get worse as the impact of the global recession takes hold.
Latest figures from the Australian Bureau of Statistics show the annual rate of growth in rents across the country has jumped to 8.4 per cent in the year to last month, up 2 per cent from 2007.
The statistics also reveal the increase in rents has jumped from 5.4 per cent to 8 per cent in Sydney, 11.2 per cent to 12.2 per cent in Perth and 8.6 per cent to 10.1 per cent in Brisbane.
Adelaide also recorded an increase in residential rental growth of 4.7 per cent to 5.4 per cent and Melbourne jumped to 6.6 per cent from 5.4 per cent.
BIS Shrapnel senior economist Jason Anderson said the rental market was only going to get worse as the country's economy faced a possible recession.
He said the roots of the rental crisis before the economic downturn were the significant increase in immigration and high interest rates that left a shortage of about 100,000 houses.
But falling interest rates were yet to have an impact on the rental shortage because construction of much-needed properties had decreased because of worsening economic conditions and higher unemployment. "This means the shortages are going to get worse over the next two years," Mr Anderson said.
"And it will probably put more pressure on the outer suburbs because that is where the cheaper rentals exist."
Mr Anderson said the rental rate increase of 8.4 per cent was well above the average 4 per cent wage increase, which made it even tougher for people facing difficult financial times.
He told The Australian the only way to ease the pressure on the rental market was to either reduce the migrant intake or
cut state government charges on developments.
The NSW Government was already reducing infrastructure costs to encourage more developers to build apartments, he said.
The figures come as the rental vacancy rate decreased in Melbourne to 1.2 per cent last year from 1.6 per cent in 2007.
Latest figures from the Australian Bureau of Statistics show the annual rate of growth in rents across the country has jumped to 8.4 per cent in the year to last month, up 2 per cent from 2007.
The statistics also reveal the increase in rents has jumped from 5.4 per cent to 8 per cent in Sydney, 11.2 per cent to 12.2 per cent in Perth and 8.6 per cent to 10.1 per cent in Brisbane.
Adelaide also recorded an increase in residential rental growth of 4.7 per cent to 5.4 per cent and Melbourne jumped to 6.6 per cent from 5.4 per cent.
BIS Shrapnel senior economist Jason Anderson said the rental market was only going to get worse as the country's economy faced a possible recession.
He said the roots of the rental crisis before the economic downturn were the significant increase in immigration and high interest rates that left a shortage of about 100,000 houses.
But falling interest rates were yet to have an impact on the rental shortage because construction of much-needed properties had decreased because of worsening economic conditions and higher unemployment. "This means the shortages are going to get worse over the next two years," Mr Anderson said.
"And it will probably put more pressure on the outer suburbs because that is where the cheaper rentals exist."
Mr Anderson said the rental rate increase of 8.4 per cent was well above the average 4 per cent wage increase, which made it even tougher for people facing difficult financial times.
He told The Australian the only way to ease the pressure on the rental market was to either reduce the migrant intake or
cut state government charges on developments.
The NSW Government was already reducing infrastructure costs to encourage more developers to build apartments, he said.
The figures come as the rental vacancy rate decreased in Melbourne to 1.2 per cent last year from 1.6 per cent in 2007.
Source: https://www.theaustralian.news.com.au/business/story/0,,24977696-25658,00.html
1Will not be visible to public.
2Receive notification of other comments posted for this article. To cease notification after having posted click here.
3To make a link clickable in the comments box enclose in link tags - ie.<link>Link</link>.
4To show an image enclose the image URL in tags - ie.<image>https://fredspage.com/box.jpg</image>. Note: image may be resized if too large
To further have your say, head to our forum Click Here
To contribute a news article Click Here
To view or contribute a Quote Click Here