Australia is facing a rental market crisis in the wake of the Covid-19 pandemic. With more than 700,000 people expected to move to Australia by the end of next year, the rental market is facing an unprecedented squeeze. This influx of people is driven by the Albanese government’s second budget, which is forecasting a temporary migration boom as a result of the “one-off” catch up after the pandemic.
The situation has been exacerbated by the influx of new tenants who have moved here following the reopening of Australia’s international borders. According to budget papers, rental demand has increased sharply as a result. This is putting pressure on the availability of rental properties, driving up prices and leading to longer wait times for new tenants.
The budget includes relief for some renters, however Treasury officials observed that Australia’s rental market is currently very tight, with advertised rents increasing by more than 10% and national vacancy rates at a near record low of 1%.
All 1.1 million households that receive the highest amount of Commonwealth Rent Assistance will be positively affected by the government’s decision to raise the rate to 15 percent.
In an effort to solve dire workforce shortages affecting many industries, Labor is proceeding with plans to increase the cap on the number of visas Australia gives to skilled migrants each year. Additionally, the government anticipates that average rental costs will rise over the next few years, as advertised rent increases take effect in existing lease agreements upon renewal.
The Reserve Bank Governor Philip Lowe recently shared at the National Press Club in Canberra that Australians are driven by their desire to live near infrastructure and are fond of large plots of land, which has sparked a conversation around how new arrivals in Australia can secure housing given the nation is going through a rental and housing affordability crisis.