“The cost of living and impact on household budgets is going to be obvious to renters…and we’re likely to see those other [suburbs yet to see an increase] shift to positive annual growth.
She said the recovery has been driven by rapidly falling vacancy rates – from almost 6% at the height of the pandemic to nearly 1.5% as tenants compete with off-price buyers – students and returning migrants.
Sydney tenants looking to take advantage of lower rental prices should consider outer suburban areas like Prairiewood, 34 kilometers west of the CBD, down 10.7 per cent to $460. The largest drop in unit rents was recorded in South Wentworthville, 28 kilometers west of the city, down 9.1%.
Moving further afield isn’t an option for mid-west tenant Zoe Davison, 23, who has to live near her college and work.
Davison spent weeks looking for an affordable rental with two other roommates, but faced fierce competition.
After providing extensive documentation including rental history, references, banking and savings history and offering $20 more than the asking rent for a home, Davison was finally approved.
“I can’t stress enough the stress of this process… we were accepted two days before we became homeless, we would have been couch surfing,” she said.
“The standards don’t match the price we pay, it’s not good value for money. They can just get away with these things because the rental market was so much in their favor.
With a budget of $250, she said living in a shared house has become a necessity rather than a choice: “There’s no way I can live alone,” she said.
“I’m going to college, I have a job and I’m struggling to get by. I am studying to become a teacher. It takes five years… you have to compromise so much, lower your level [of living] just to live somewhere, and you have to say thank you.
Senior economist at the Australia Institute‘s Center for Future Work, Alison Pennington, said the pandemic housing boom has increased the intensity of competition for “forever homes” and stability, widening the gap between housing haves and have-nots.
“Dual-income households, borrowing more under near-zero interest rate conditions, adds Mom and Dad’s Bank, and we’ve seen a lot of house price increases for single-family homes, in general, and this surge displaced a large number of single-family tenants.
Australian Council of Social Services (ACOSS) CEO Dr Cassandra Goldie said low-income people were being excluded from major cities and some areas.
“Those dependent on income support payments and unable to access social housing have few housing choices and are often forced to live in unsuitable, unsafe, inaccessible or isolated situations from services and jobs,” she said.
“Rent assistance is only $73 a week for a single person and hasn’t increased in real terms for over 20 years. Rents have risen dramatically, particularly in regional Australia where they have increased by 18% in the past two years alone.
“How is someone on JobSeeker, with $46 a day – only $16,700 a year – supposed to pay rent or buy a house? How will a retiree in a situation of severe rental stress buy a home?
“Without major changes in housing policy, this situation is likely to continue to deteriorate. The next federal government must tackle the housing affordability crisis head-on.