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Housing crisis: Desperate tenants are paying up to a year's rent in advance

Business

If you are looking for a rental in Brisbane good luck. According to SQM Research there were just 5300 vacancies in the city in February.

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To be precise, that’s the total number of dwellings that have been on the market for three weeks or more and reflects a vacancy rate of 1.5 per cent, slightly worse than it was in January and much worse than it was this time last year when Brisbane had 7530 residential vacancies.

And don’t even think about heading interstate because Perth, Adelaide, Canberra, Darwin and Hobart were even worse, according SQM.

The situation has become so bad that people from interstate were willing to pay a year’s rent up-front to secure a property, according to Housing Minister Leanne Enoch.

Only Sydney and Melbourne had healthy vacancy rates and that was partly because of the lack of international students. Asking prices for rents in those cities has plummeted while in Brisbane they have risen a relatively meagre 1.6 per cent for houses and 1 per cent for units.

SQM said the reason for the lower rental hike was that Brisbane had been in a tight market for some time and rents only jumped when there is a significant downturn in supply. It was also based on what people were willing to pay and Brisbane was a different market to Perth where rents have jumped 12 per cent in a year.

The average rent in Brisbane in February was $477 for a house and $382 for a unit.

But spare a thought for Sydney where life in the CBD was so dire in May last year that the vacancy rate was almost 15 per cent. It’s a relatively better place now with 6.3 per cent “indicating a return of life for Sydney city”.

“Elsewhere, we are still recording strong interest from tenants in larger properties in outer suburban locations as well as wider regional Australia,” SQM said.

Housing Minister Leanne Enoch told Parliament there were “incredible pressures on the market”.

“During COVID people have stayed still. They have not moved around as much as they have in the past, and that has put unprecedented pressures on the rental market and the market more broadly,” Enoch said.

She said the Federal Government needed to step in.

“It is about to oversee the National Rental Affordability Scheme drop off the cliff in the next few years given that it has decided to move away from that funding. There is also underfunding with regard to the national agreements on housing and homelessness. Those things are all having an impact.”

Enoch said the State Government had Housing Strategy worth $1.6 billion which was building more than 5500 social and affordable homes is more important than ever.

Meanwhile, the Australian Bureau of Statistics said the value of Australia’s housing stocks rose $257 billion in the December quarter as prices around the nation continued to increase in value.

It was the strongest increase since 2016.

The ABS found that Australian residential property prices rose 3 per cent in the quarter. Brisbane ranked fourth among the capitals with a rise of 2.7 per cent behind Melbourne with 3.4 per cent, Sydney 3 per cent and Perth 2.9 per cent.

The total value of Australia’s residential dwellings was $7.7 trillion, a rise of $500 billion since June and a $257 billion increase in the quarter. The mean price nationally was $728,000 and in Queensland it was $556,000.

The annual rise for 2020 was 3.6 per cent and it was the first time that all capital cities had an annual increase since 2014.

The Commonwealth Bank also released data showing prospective spending on residential property was nearing a record.

 

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