City rents rising
An interesting little anecdote from PropertyChat, with a Melbourne CBD unit seeing a rental increase of 58.3 per cent.
Melbourne now has the lowest number of advertised rental listings since the weekly records began in January 2011.
Similarly had a rental unit in our portfolio come up for lease recently in Sydney, and although we only increased the asking rental by a more modest amount, there were six applications within a few hours...three of which were above the asking price.
Record low rental vacancies
On the current trajectory, the capital city rental supply is on track to collapse in 2023.
Firstly, because demand is set to increase significantly.
The Centre for Population will release a statement on Friday this week, highlighting Australia's rising dependency ratio and the need to ramp up immigration and grow the skilled labour force.
Treasurer Jim Chalmers has already noted that the report will underscore the desire to build a bigger and better-trained workforce, including expanding opportunities for women.
And secondly, because the supply of rentals is drying up.
Interest rates have been increased very quickly since May, and the fixed rate cliff has yet to hit home for many investors.
Meanwhile, refinancing rules have also been tightened dramatically, with the introduction of a 300 basis points lending assessment buffer.
The inability to refinance will lead to many landlords to selling up, and will keep too many prospective new investors out of the market, while the balance of power in rental markets legislation has also tilted significantly in favour of tenants over recent years.
Australia's population will be projected in the population statement to increase from 26 million to 39.2 million by 2060, although historically forecasts have tended to undershoot the reality significantly.
