By Shannon Molloy
Rental vacancy rates across Australia have plunged by half since the start of the Covid pandemic, showing just how severe the housing crisis is.
The latest PropTrack data reveals how surging demand from tenants is far outstripping the supply of dwellings in most capital city areas.
Perth has the most constrained rental market in the country, with a vacancy rate of just 0.85%, followed closely by Adelaide on 0.92%.
Conditions are very tight in the three major cities – Sydney’s rental vacancy rate is 1.7%, Melbourne’s is 1.4%, and Brisbane’s is 1.3%.
A balanced rental market is considered to be one with a rental vacancy rate of 3% or more.
Every city bar Hobart and Canberra saw further declines in their rental vacancy rates in February.
But it’s analysis of the change in the climate since the start of the pandemic that reveals just how swiftly things have deteriorated.
“Nationally, the rental vacancy rate has fallen by 52% since the pandemic and is now at its lowest level since late 2018, showing just how scarce rental properties are,” PropTrack senior economist Paul Ryan said.
Things are particularly dire in Perth, where the rental vacancy rate has slumped by a staggering 69% since pre-Covid.
“Vacancy rates have continued to fall markedly over the past year, down 0.6 percentage points. This is a continuation of the trend seen since early 2021.”
Capital cities are seeing a rapid tightening, with the combined rental vacancy rate sliding another 0.14% in February.
“It’s now tougher to find a home to rent in the capital cities than in regional areas, which is a reversal of trends seen since before Covid,” Mr Ryan said.
Analysis released last week found some Sydneysiders are paying more than $350 extra per week in rent than they were just 12 months ago.
In Melbourne, some tenants are forking out as much as $165 per week more, while in Brisbane, some are forced to find an extra $185 per week.
Advocacy group Everybody’s Home said the soaring cost of rent has now become an “emergency” and called on the Commonwealth to intervene.
“When energy prices skyrocketed during the pandemic, the Federal Government stepped in to protect people,” the group’s spokesperson Maiy Azize said.
“But this housing crisis doesn’t seem to be hitting home fast enough for those who hold the purse strings.
“Homes are just as important [as power bills]. We need [politicians] to understand that this is an emergency, and that homes are at stake.”
Mr Ryan warned that things are likely to get worse long before they get better.
“With demand for rentals expected to remain strong, we see no reprieve in the coming months. These market conditions mean prices will continue to grow strongly throughout the year.”
Indeed, late last month, St George economists forecast an 11.5% surge in rent prices over the course of 2023, which comes on top of a 10% jump last year.
In an article for The Conversation earlier this year, Associate Professor Bruce Bradbury from the Social Policy Research Centre at UNSW Sydney called for the rent assistance payment to be doubled.
The welfare measure, available to those on the pension, receiving the Family Tax Benefit and Parenting Payment, or on JobSeeker, “is only modest”.
And the thresholds that determine the amount provided are woefully out of date – considerably smaller than actual market rents.
“There’s ample scope to lift it to something nearer the rents actually paid,” Associate Professor Bradbury said. “For many Australians, the rent crisis is just starting.”