Renters are being hit hard by Australia’s ninth consecutive interest rate increase as landlords pass along rising mortgage rates.
Experts also predict that rent increases will persist in the next months.
Check out the Market’s Although some economists claim that Australia’s rental issue is self-inflicted by its very high levels of migration, Phil Portman said that these significant hikes are having an effect on those who are already struggling.
State-by-state variations are significant, but the average monthly rise nationwide over the last 12 months was $161.
West Australians have had the largest average monthly gain at $180, followed by Queensland at $177, Victoria at $169, South Australia at $158, and NSW at $142.
The last thing Australians need is a rent rise, according to Mr. Portman, who also lamented the growing cost of groceries and electricity.
Regrettably, that is exactly happening, placing more homes under further financial strain.
Renters in WA are paying $2,160 more annually, those in Queensland $2,124 more, those in Victoria $2,028 more, and those in New South Wales $1,704 more.
Mortgage repayments have drastically risen as a result of the Reserve Bank of Australia’s hike in the cash rate from 0.1% in April of last year to 3.35 % today, while 53.9% of renters have witnessed an increase in their monthly rent over the last year.
According to Mr. Portman, “Over a year, it’s enough to pay for a round-trip international flight, around 22 fill-ups of a 50-litre tank vehicle, or maybe more than a year’s worth of energy.”
Given that homeowners have seen nine straight rate increases, he said that many landlords are passing these expenses along to their renters, which is why rental rates are rising throughout the nation.
“It’s safe to suggest that renters might continue to face the burden in the coming months as long as those rates continue to grow.”
Rent hikes aren’t simply the result of rate increases; there is also more demand now that borders have reopened and returning foreign students.
Leith van Onselen, an economist, claims that Australia’s rental dilemma is a result of the country’s very high migration rates.
The post-Covid migration inflow increased from 35,000 to 195,000, which is much more than the long-term norm of 100,000.
According to the University of New South Wales City Futures Research Centre, Australia’s social housing supply increased by 9% in the 14 years leading up to 2020, whereas immigration-driven population growth increased by 25% over the same time.
The enormous rent rises are also having an impact on people’s ability to save. According to research from Compare the Market, 27.1% of Australians haven’t been able to save anything, 36.8% haven’t been able to save as much as they normally would, and 12.1% have seen their savings decline.
According to Mr. Portman, “We don’t want to see Australians using their savings to pay for everyday costs like rent.”
Before you sign on the dotted line, be sure you can afford any rent hikes. We anticipate further financial difficulty in 2023, similar to what we seen in 2022.
If policymakers are sincere about resolving Australia’s housing dilemma, Mr. Van Onselen said, they should begin by reducing migration rates so that supply and demand are more evenly balanced.
In the absence of such action, he said, “Australia’s rental issue will become a permanent part of Australia.”
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