Availability issues drive up rental market prices

With the recent revelation of the federal budget and the election just weeks away, the rising cost of living is in the spotlight as Australians continue to struggle, thanks to the ongoing COVID-19 pandemic and the Russian conflict. -Ukrainian.

With support and promising initiatives from the federal government for everything from income to fuel prices, the boom in the rental market seems to have been forgotten.

Instead, the federal government’s attention has focused on homebuyers, with incentives such as the first home loan deposit system helping buyers secure a home loan with just a five percent deposit. , and the Regional Housing Guarantee offering first-time home buyers, permanent residents and those who have not owned a home in the past five years help to buy or build new homes in rural areas.

The federal government eagerly encouraged these deposit guarantee schemes, as Parliament conducted a lengthy inquiry into what could be done to improve housing affordability for those looking to buy.

In fact, Prime Minister Scott Morrison reinforced that position when he said the budget was about getting Australians into homes, saying “the best way to support people who are renting a home is to help them buy a house”.

Although Mr Morrison received a lot of backlash for this comment, the current rental market reality is that prices are only expected to rise for the foreseeable future.

Currently, a third of Australians are renters, with 14% already experiencing rental stress, as more than 30% of their income is spent on rent.

For people already on housing benefit, including welfare recipients and pensioners, University of Sydney planner Nicole Gurran said the rental assistance payment was too low for some time and that at least 30% of the beneficiaries of this housing allowance remained in a situation of rental stress. , even after receiving it.

As always, however, the situation here in Perth is different from that of the larger east coast markets.

With most rents in Western Australia lower today than they were 10 years ago, pressures in the rental market have more to do with availability than price.

Thanks to supply chain disruptions, exploding construction costs and shortages of skilled workers that we have seen throughout COVID-19, many rental developments planned by WA have been stalled, leaving tenants compete with hundreds of others on existing properties available on the market.

As more and more people compete for less and less rental properties, WA is in a unique position that actually encourages tenants to make the switch and allows these new buyers to fully benefit from current federal government policies and of the opposition.

We know that the key factor that prevents many people from making the decision to buy a house or an apartment is the relatively high initial outlay, where most cannot save enough money for the deposit and it is this situation which the First Home Loan Deposit Scheme hopes helps with, allowing buyers to obtain a home loan with just a five percent deposit.

Additionally, while WA housing developments are still grappling with the construction costs and skilled worker shortage issues of the past two years, the current options for completed and under-development apartment projects on the market mean that buyers who invest in this option are less likely to be locked out. are waiting for their new home and might be able to move in right away.

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