Growing Australian Housing Crisis & a Deep Dive into the Rental Market

Australia is currently facing a dire housing crisis, and nowhere is this more evident than in Melbourne, where rental prices are soaring, supply is dwindling, and vulnerable renters are struggling to find affordable housing. This crisis is not exclusive to Victoria but extends throughout the country. We'll explore the issues highlighted and discuss how Cornus can help alleviate this crisis by providing affordable housing options.

"Rents to rise, supply to fall and renters are ‘extremely concerned' about homelessness, says a new report from the REIV."

The Real Estate Institute of Victoria (REIV) conducted a survey that exposed several alarming trends:

1. An increase in contact from landlords looking to recover increased costs due to new land tax policies.
2. A rise in rental providers looking to sell their properties, potentially reducing the supply of rental properties.
3. Renters expressing extreme concern about rent increases and difficulty in finding a property in a tight market.
4. A consistent decrease in interest in buying investment property since 2021.

REIV CEO Quentin Kilian emphasised that the rental crisis is real and will only get worse with the introduction of new taxes. This crisis has pushed landlords to raise rents to compensate for added costs, leading to a high risk of homelessness among renters.

"The persistent undersupply of properties available to rent is pushing vacancy rates lower."

REA insights recently highlighted that vacancy rates have fallen to record lows in Australia, exacerbating the housing crisis. The national rental vacancy rate is now just 1.10%, with sharp declines in cities like Canberra and Sydney. The demand for rental properties has outstripped supply, causing weekly rents to rise by 14.6% over the year to August 2023.

The rental crisis is particularly harsh on low-income renters and those on welfare benefits. Affordable rental options are scarce and even with a 5.75% increase in the national minimum wage, affordable rentals remain limited. A critical shortage of affordable rentals highlights the urgent need for increased funding and support for affordable and social housing.

"Migration Adds 450,000 People to Australian Population."

Australia's population is growing at a rapid pace, with a 2.2% increase in the 12 months leading up to March 31. The growth is primarily driven by net overseas migration, which accounted for 81% of the increase, adding 454,400 people to the population. As more people flock to Australia, the demand for housing continues to surge.

The housing crisis in Australia, particularly in cities like Melbourne, is a result of various factors, including tax policies, supply shortages and the high demand created by population growth.

Real estate developers can help address the housing crisis by providing affordable housing options for those struggling to make ends meet in a market with soaring rents and limited supply. The housing crisis in Melbourne, and across Australia, is a pressing issue that demands immediate attention and action. As Australia's population continues to grow, it is crucial to prioritise affordable and accessible housing to ensure that everyone has a place to call home. At Cornus, we are engaging with our builder to ensure we can keep providing high quality projects at affordable prices and help first home buyers and all buyers, purchase a home. 

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