Lack of Rental Investment Keeping Rents High

The following from HIA (22 April 2008):

Rents continue to show no signs of easing in most capital cities of Australia. The ABS’ Consumer Price Index revealed that over the first three months of 2009 rents grew by 1.7 per cent to be 8.1 per cent higher than 12 months ago, said the Housing Industry Association, Australia’s largest building industry association.

HIA Chief Executive - Association, Mr Chris Lamont said that Australia’s housing supply is simply not keeping up with the demands of a strongly growing population. The acute shortage of new housing stock remains the major driver in pushing rents higher and keeping rental vacancies at record low levels.

“Investment in new private rental accommodation has not responded to low interest rates and is languishing in a slow economy with constrained credit. There is a requirement to provide a stimulus to new residential construction particularly in the affordable rental sector,” said Mr Lamont.

“HIA estimates that across Australia 30 per cent of private renters, or 600,000 households are in rent stress. There is a high risk this number will increase as rent and employment pressures persist throughout 2009”, said Mr Lamont.

On a capital city basis rents grew strongly over the March quarter in most capital cities. The capital cities with the strongest population pressures - Perth, Darwin, and Brisbane - remain under the greatest pressure from rental increases.