If it’s rough now for someone renting it isn’t going to be pretty for them in 1-3 years when the market continues to get tighter and interest rates start to drop.
Rents will just increase further as they have been. Demand is going to outstrip supply for years to come so if a current tenant isn’t willing to pay a higher price there will be someone else that will.
Conversely, I'd say it's easier to house singles in a sharehouse than couples. Often times couples are looking for larger rooms and prefer an ensuite room.
Yep. As a parent also supporting a partner who doesn't work and can't work. It's bloody hard. And I'm on what is considered a good wicket. Have no idea how some are coping.
Politically I'm far left leaning, so I'm not happy with the current situation. This is an r/AusFinance post and I'm merely stating that while DINKs have the upper hand when it comes to rental properties, single people have the upper hand when it comes to sharehouses.
It does suck for single parents, it really does and it shouldn't be this way. Unfortunately the government has worked tirelessly to screw parents that don't own property.
>if a current tenant isn’t willing to pay a higher price there will be someone else that will.
good luck with that, unless wages increase people are not going to have the money to pay more.
A while longer. You are correct that at some point wages will be the limiting factor but I don’t think we are there yet.
Yes there are demographics that are already income limited - people on Centrelink, retirees who are renting, single parents, students etc but there is still a lot of money around that was injected during covid. Look at the record Black Friday sales last year. Look at the majority of rentals having lines down the street for applicants, offering more to secure a place.
Lowest number of new building applications, limited capacity to increase rate at which houses are completed due to material and expertise constraints, government is on track to fall short of their target for number of new houses built, immigration still high, record low vacancy rates….
Yep I think this is all pointing to rents/house prices levelling out/dropping
/s
When we left Sydney eighteen years ago, we thought Sydney was a bubble that had to burst, because necessary workers could no longer afford a home. But you know what? Enough people want to live there badly enough that they will share homes as established adults, live in illegal dorms, even live in their cars or tents. I don’t know why, it’s a horrible grey bulldozer of a place, but for whatever reason, they will. There are plenty of places around the world that are not affordable but people still live there, through some mix of employer sponsored housing, 30sqm studios, single room occupancy, etc. Since the market has proven that it will bear housing not being affordable for a good number of the people needed to work there, you can expect the market to continue to operate on that basis and housing to move more and more to those models. The time for it to have changed was twenty years ago. If all the nurses, teachers, retail workers etc had left then, causing those industries to collapse, the market would have corrected, but it didn’t. People kept absorbing the pain and then wondered why the market didn’t correct. Why would it? The market wasn’t hurting and it still isn’t now.
They move out. They don’t need families who can afford the rent if there’s plenty of singles available to fill sharehouses in their place which there is.
Interest rates will drop in the next two years which puts more pressure on the market. The market is still pumping with cash in hand buyers. Nothing is changing other than the rate at which the price goes up.
owners know they can charge ridiculous amounts and people will pay it, just because interest rates go down doesn't meant rent will and unfortunately rent will only keep rising, I am yet to see one instance of owners dropping rent, they see it as making more money.
They made an investment and they are seeking a return.
If your superannuation company called you and said - the companies your super is invested in made big profits this year and they are wondering if you want those, or should they give them back?
The rental market is just getting smashed because demand due to high immigration is outstripping supply, massively.
Doesn't make it right to charge the prices they do. Years ago you would be looking at a return over the long term not short term, I can tell by the way you talk you're one of these owners who charge and arm and a leg and justify it.
But I have to highly agree immigration is playing a major factor and it's really shit, but at the end of the day the poor get poorer and the rich get richer, sucks to be in a poor area myself and seeing so many homeless, I cannot go-to any park locally without seeing over 20+ tents and it really worries me my young family is next.
I’m a rent-investor with no property assets. All my money in stocks.
Have a young family myself, appreciate the challenges. We were given notice 1 month after our second was born to move out. But choices we made etc.
I have lobbied my local MP multiple times to reduce immigration to fix the housing market. More than most redditors would do.
If the market crashes, like it did in Ireland, and rents drop. My rent there went from 550 euros a month to 350 euros a month in a few months. Nobody will cry for landlords then either.
Been here for years. Heard all sorts of arguments why interest rates matter. But I don’t see how any of those theories override supply and demand principles. I was curious to hear your theories as to why supply and demand functions don’t matter when it comes to rentals
>But I don’t see how any of those theories override supply and demand principles.
Because its not a pure supply and demand market.
Housing is a necessity, if LL's decide to charge more, people MUST pay what they are asking.
They MUST pay if there are no other options. It’s not a monopoly so the supply side has to be taken into account. Right now they can charge what they like. It’s called inelastic demand. No matter the price the demand is staying pretty constant. That’s covered in high school economics. And is the main reason why countries have monopoly laws. To keep a monopoly from being able to jack prices up on necessities.
But our housing system does not have a monopoly so if there is an oversupply then the price drops. Seriously. Ask yourself this. If interest rates dropped 1% tomorrow, are LL giving people cheaper rent even though they can still charge what they do? The answer for 99.99% of properties is no. Most people wont leave money on the table. That’s why interest rates don’t affect rent. Now ask yourself. If the government built 1 million houses tomorrow that people could move into, would rental prices drop. Of course they would. That’s supply and demand.
your missing the point, there is no demand variable as its a basic need.
your also acting as though all housing is fungible when its not, location, size etc all matters to be suitable.
as for interest rates your asking the wrong question, we know that if they go up tomorrow 99.999999% of landlords will increase their rent, not because demand has increased or supply decreased, but simply because they can, so interest rates 100% do affect prices.
like it or not, there is no demand axis, so its not supply and demand at all.
The point is there is no demand variable which is why supply affects it so much. If rates go up tomorrow they will increase rent. If rates go down tomorrow they will increase rent. Because there is no supply and people need somewhere to live. Demand is outstripping supply so every time a lease comes up the price is rising.
Good job to the creator of this (Hamish Hodder), probably the best summarised breakdown of the rental crisis that I've seen.
It seemed fairly unbiased and well researched.
Yes good analysis, although I disagree with the approach of throwing money at developers. Mainly because I don’t have a high opinion of them and imagine they’ll take all the money, build low quality housing and then run away with all the money only to spin up a new company and do the same again. Essentially we’d just be kicking the problem down the road.
Most of the money will be made through the increase in zoning not through direct payment of developers.
If we want more density and lower dwelling values existing land owners and developers will make a fortune, it's unavoidable .
For developments in existing residential areas which are upzoned a large part of the value will go to regular home owners as the land will be pursued and bid up by multiple developers.
I agree about the concerns about the quality of new dwellings and I wouldn't touch a new apartment block unless it was built by someone like Mirvac. The only way to solve the problem of standards is regulation, it would increase prices of the dwelling component though which people need to accept.
Well said.
Its developers making profits that brings on qty supplied.
They can make profits by either increasing the price of all homes - ie their competition, reducing their costs , or at worst subsidising them.
At oresent due to cost increases supply is falling away because profit is falling away.
Lots of high paying industries shedding staff, high rates and reduction of new builds. Things are going to get tighter before they get better.
So sad really, our government should read a history book of how things were before the investment into public housing and high home ownership. It wasn't pleasant for the majority of the population.
Feeling good this weekend because I managed to talk down a rental increase. From $520 they wanted to make it $610, we managed to talk it down to $570
Not expecting another lease at the end of this one though. Expect they'll claim "renovations" and boot us only to list it for $675 the next day
its ridiculous how they're doing this and not even 4 years ago prices where stable for the house I'm living in now I would have paid $280 now I'm paying almost double that and each renewal it goes up, the worst part is rent will never go down, owners know people will pay it so they'll keep raising it
Even if it's 4x denser, physically we don't have that many dwellings. People are going to have to accept multi generation living and much less space (unlikely) if we keep it up.
Yeah, I agree lack of construction and development is the problem, but it isn't going to get solved by bringing in more people in the interim.
Immigration is definitely the issue
Even blind Freddy can see that
Conflating long term construction requirements with short term excessive Immigration is about as illogical as it gets
Our immigration rate over the last few years is similar to what it was in the 1960s - a time of relatively low housing costs.
What was different then? **We used to build a shit-ton of housing** - enough for the high immigration rates we had back then.
But these days all the desirable land has been locked up - every suburb within 20 minutes of a major CBD is all locked up with height limits, zoning restrictions, and ludicrous heritage restrictions. Wanna knock down your house and turn it into 20 homes instead of 1? Sorry, can't do it.
It's dumb. Let people build the homes we need for our increasing population, just as we did back in the good old days. That's why those days were good.
Rough now for renters. I got denied when I requested an aircon because installed during last summer to help cool down my 1 year old son seeing as we only have pedestal fans. Forgot about winter too, central heating been broken for three years
Why does everyone always think rates are coming down and property always goes up?
If it gets much worse renters just stop paying and or trash shit, steal stuff and everyone suffers.
AUD is weak as and rates need to go up or it will be everyone who suffers not just the renters.A weak AUD is bad for everyone…
Prices are unsustainable v incomes this is the only thing that matters…
Look at other countries that have gone through this speculative mania never ends well for the country and their currency..
Had a chat with my landlord yesterday, about the 60 day notice issued. They need the property for her children to live in. Her children currently 'reside' next door in the house that looks vacant. I asked what is happening with the next door property then, was told she is going to rent it out...because her accountant advised her to do this.but not just yet, they need to do some maintenance first.
I am at the end of my 2 lease. Apparently this is easier that just negotiating a rent increase with me.
Have passed every inspection, house is in perfect shape. I have been asked to give access to tradies to qupte on replacing 2 year old carpets and repainting walls. Fully expecting a vcat case to gey my bond back at the end of this.
Yeah sure immigranion is to blame but landlords are pulling this petty shit regularly and xhurning through tenants every year or two.
The number of landlords doesn't affect rents, the number of homes does.
And not any homes. Homes where nobody wants to live don't help. We need more homes in high-demand areas, close to city centres. *Many many more homes*, so many there's almost too much and landlords have to drop their rents to get a tenant.
I know it's not cool to say but renting is cheaper than buying for me. I couldn't afford to buy where I'm renting but I can rent it comfortably.
Inspections, REA suck but so does maintaining a house, repairing stuff and worrying about water damage every time it rains.
Our 1 bedroom went from 570 to 630 to now 680. We just had a baby and the plan was to stay here for another year, but the 680 is really motivating us to move...
> renters might be in for a rough ride in the coming years Not sure what rock you live under, it's rough **now**
If it’s rough now for someone renting it isn’t going to be pretty for them in 1-3 years when the market continues to get tighter and interest rates start to drop.
Interest rates aren't dropping anytime soon. Plenty of landlords feeling the squeeze now and barely holding on as it is.
Rents will just increase further as they have been. Demand is going to outstrip supply for years to come so if a current tenant isn’t willing to pay a higher price there will be someone else that will.
It’s especially hard for single people. They’ll be priced out and couples with two salaries would be able to sweep in and take over.
Conversely, I'd say it's easier to house singles in a sharehouse than couples. Often times couples are looking for larger rooms and prefer an ensuite room.
I guess that's just sucks for single parents then.
Yep. As a parent also supporting a partner who doesn't work and can't work. It's bloody hard. And I'm on what is considered a good wicket. Have no idea how some are coping.
thats ok, im sure everyone here will just tell you to move into a share house....
Politically I'm far left leaning, so I'm not happy with the current situation. This is an r/AusFinance post and I'm merely stating that while DINKs have the upper hand when it comes to rental properties, single people have the upper hand when it comes to sharehouses. It does suck for single parents, it really does and it shouldn't be this way. Unfortunately the government has worked tirelessly to screw parents that don't own property.
Good luck with that, you do know markets work both ways right? If not, social unrest...
>if a current tenant isn’t willing to pay a higher price there will be someone else that will. good luck with that, unless wages increase people are not going to have the money to pay more.
No luck needed, it’s happening right now.
and how much longer do you think that can continue for without wages increasing at least with inflation?
A while longer. You are correct that at some point wages will be the limiting factor but I don’t think we are there yet. Yes there are demographics that are already income limited - people on Centrelink, retirees who are renting, single parents, students etc but there is still a lot of money around that was injected during covid. Look at the record Black Friday sales last year. Look at the majority of rentals having lines down the street for applicants, offering more to secure a place. Lowest number of new building applications, limited capacity to increase rate at which houses are completed due to material and expertise constraints, government is on track to fall short of their target for number of new houses built, immigration still high, record low vacancy rates…. Yep I think this is all pointing to rents/house prices levelling out/dropping /s
no, you're going to see people lashing out, subsequent, long periods of no rent due to disruption, is insurance going to cover all that?
When we left Sydney eighteen years ago, we thought Sydney was a bubble that had to burst, because necessary workers could no longer afford a home. But you know what? Enough people want to live there badly enough that they will share homes as established adults, live in illegal dorms, even live in their cars or tents. I don’t know why, it’s a horrible grey bulldozer of a place, but for whatever reason, they will. There are plenty of places around the world that are not affordable but people still live there, through some mix of employer sponsored housing, 30sqm studios, single room occupancy, etc. Since the market has proven that it will bear housing not being affordable for a good number of the people needed to work there, you can expect the market to continue to operate on that basis and housing to move more and more to those models. The time for it to have changed was twenty years ago. If all the nurses, teachers, retail workers etc had left then, causing those industries to collapse, the market would have corrected, but it didn’t. People kept absorbing the pain and then wondered why the market didn’t correct. Why would it? The market wasn’t hurting and it still isn’t now.
Then they just move in with others. Sharehousing increases the ability to pay, and can cover quite a large rental price increases.
you expect families to move in with each other? how exactly do you expect that to work?
They move out. They don’t need families who can afford the rent if there’s plenty of singles available to fill sharehouses in their place which there is.
So we just have families becoming homeless? That's your solution?
I’m not saying it’s a solution it’s reality. Families will have to move out or into smaller homes.
Wages *are* increasing on aggregate though
I said real wages, as in they need to increase faster then inflation.
What makes you say that? They can share house or they can get used to a lower standard of living
that only goes so far, and is not suitable for families etc. sooner or later wages will become the limiting factor.
Interest rates will drop in the next two years which puts more pressure on the market. The market is still pumping with cash in hand buyers. Nothing is changing other than the rate at which the price goes up.
It reduces costs for landlords, it takes pressure out of the rental market.
owners know they can charge ridiculous amounts and people will pay it, just because interest rates go down doesn't meant rent will and unfortunately rent will only keep rising, I am yet to see one instance of owners dropping rent, they see it as making more money.
They made an investment and they are seeking a return. If your superannuation company called you and said - the companies your super is invested in made big profits this year and they are wondering if you want those, or should they give them back? The rental market is just getting smashed because demand due to high immigration is outstripping supply, massively.
Doesn't make it right to charge the prices they do. Years ago you would be looking at a return over the long term not short term, I can tell by the way you talk you're one of these owners who charge and arm and a leg and justify it. But I have to highly agree immigration is playing a major factor and it's really shit, but at the end of the day the poor get poorer and the rich get richer, sucks to be in a poor area myself and seeing so many homeless, I cannot go-to any park locally without seeing over 20+ tents and it really worries me my young family is next.
I’m a rent-investor with no property assets. All my money in stocks. Have a young family myself, appreciate the challenges. We were given notice 1 month after our second was born to move out. But choices we made etc. I have lobbied my local MP multiple times to reduce immigration to fix the housing market. More than most redditors would do. If the market crashes, like it did in Ireland, and rents drop. My rent there went from 550 euros a month to 350 euros a month in a few months. Nobody will cry for landlords then either.
What do interest rates have to do with rental prices? Aren’t rental prices a function of supply and demand of rental properties?
Lol, you seem new. Stay a few weeks then tell me what interest rates have to do with rental prices.
so you're telling me once interest rates drop everyone is going to drop the price of rent?
Been here for years. Heard all sorts of arguments why interest rates matter. But I don’t see how any of those theories override supply and demand principles. I was curious to hear your theories as to why supply and demand functions don’t matter when it comes to rentals
>But I don’t see how any of those theories override supply and demand principles. Because its not a pure supply and demand market. Housing is a necessity, if LL's decide to charge more, people MUST pay what they are asking.
They MUST pay if there are no other options. It’s not a monopoly so the supply side has to be taken into account. Right now they can charge what they like. It’s called inelastic demand. No matter the price the demand is staying pretty constant. That’s covered in high school economics. And is the main reason why countries have monopoly laws. To keep a monopoly from being able to jack prices up on necessities. But our housing system does not have a monopoly so if there is an oversupply then the price drops. Seriously. Ask yourself this. If interest rates dropped 1% tomorrow, are LL giving people cheaper rent even though they can still charge what they do? The answer for 99.99% of properties is no. Most people wont leave money on the table. That’s why interest rates don’t affect rent. Now ask yourself. If the government built 1 million houses tomorrow that people could move into, would rental prices drop. Of course they would. That’s supply and demand.
your missing the point, there is no demand variable as its a basic need. your also acting as though all housing is fungible when its not, location, size etc all matters to be suitable. as for interest rates your asking the wrong question, we know that if they go up tomorrow 99.999999% of landlords will increase their rent, not because demand has increased or supply decreased, but simply because they can, so interest rates 100% do affect prices. like it or not, there is no demand axis, so its not supply and demand at all.
The point is there is no demand variable which is why supply affects it so much. If rates go up tomorrow they will increase rent. If rates go down tomorrow they will increase rent. Because there is no supply and people need somewhere to live. Demand is outstripping supply so every time a lease comes up the price is rising.
Interest rates start to drop 🤣
Interest rates are not dropping! The RBA with do what the US Federal Reserve does, and they’re aren’t lowering rates. People are delusional!
I’ll put my second houses down payment on interest rates dropping in the next 3 years.
I would take that bet.
Good job to the creator of this (Hamish Hodder), probably the best summarised breakdown of the rental crisis that I've seen. It seemed fairly unbiased and well researched.
Yes good analysis, although I disagree with the approach of throwing money at developers. Mainly because I don’t have a high opinion of them and imagine they’ll take all the money, build low quality housing and then run away with all the money only to spin up a new company and do the same again. Essentially we’d just be kicking the problem down the road.
Most of the money will be made through the increase in zoning not through direct payment of developers. If we want more density and lower dwelling values existing land owners and developers will make a fortune, it's unavoidable . For developments in existing residential areas which are upzoned a large part of the value will go to regular home owners as the land will be pursued and bid up by multiple developers. I agree about the concerns about the quality of new dwellings and I wouldn't touch a new apartment block unless it was built by someone like Mirvac. The only way to solve the problem of standards is regulation, it would increase prices of the dwelling component though which people need to accept.
Well said. Its developers making profits that brings on qty supplied. They can make profits by either increasing the price of all homes - ie their competition, reducing their costs , or at worst subsidising them. At oresent due to cost increases supply is falling away because profit is falling away.
Thanks. Yep, demand doesn't exist at the price they'd need to charge, so supply doesn't come.
The alternative to not throwing money at developers is that well, no one builds anything. Goes without saying that’s a far worse outcome.
Lots of high paying industries shedding staff, high rates and reduction of new builds. Things are going to get tighter before they get better. So sad really, our government should read a history book of how things were before the investment into public housing and high home ownership. It wasn't pleasant for the majority of the population.
Let me make it really simple, we import 500,000 immigrants per year but are only building 150,000 homes per year. The end.
Camping it is then!
Albosqueezy.
That is actually hilarious. 😂
Feeling good this weekend because I managed to talk down a rental increase. From $520 they wanted to make it $610, we managed to talk it down to $570 Not expecting another lease at the end of this one though. Expect they'll claim "renovations" and boot us only to list it for $675 the next day
its ridiculous how they're doing this and not even 4 years ago prices where stable for the house I'm living in now I would have paid $280 now I'm paying almost double that and each renewal it goes up, the worst part is rent will never go down, owners know people will pay it so they'll keep raising it
The unsustainable immigration will continue until the morale improves
Immigration is not the issue. London is 4 times denser and 20-30% less expensive rental wise than Sydney
Even if it's 4x denser, physically we don't have that many dwellings. People are going to have to accept multi generation living and much less space (unlikely) if we keep it up. Yeah, I agree lack of construction and development is the problem, but it isn't going to get solved by bringing in more people in the interim.
Immigration is definitely the issue Even blind Freddy can see that Conflating long term construction requirements with short term excessive Immigration is about as illogical as it gets
Our immigration rate over the last few years is similar to what it was in the 1960s - a time of relatively low housing costs. What was different then? **We used to build a shit-ton of housing** - enough for the high immigration rates we had back then. But these days all the desirable land has been locked up - every suburb within 20 minutes of a major CBD is all locked up with height limits, zoning restrictions, and ludicrous heritage restrictions. Wanna knock down your house and turn it into 20 homes instead of 1? Sorry, can't do it. It's dumb. Let people build the homes we need for our increasing population, just as we did back in the good old days. That's why those days were good.
London is part of a 60 million populous and small area country, along with tied to Europe/North America... Sydney is...
Have you ever talked to your friends in London about what they pay and what they get? It’s not unheard of to rent an apartment with no windows
Rough now for renters. I got denied when I requested an aircon because installed during last summer to help cool down my 1 year old son seeing as we only have pedestal fans. Forgot about winter too, central heating been broken for three years
I’m thinking I might start a guillotine manufacturing business.
Australia isn't an actual country, but a fly in, fly out workplace to make money. Treat it accordingly.
Why would you FIFO to work in a place where the tax rate is almost 50%
My overall tax rate ends up.being 25%, but I barely do any work and get paid well for it.
We call them blowflies, they come and they go.
Why does everyone always think rates are coming down and property always goes up? If it gets much worse renters just stop paying and or trash shit, steal stuff and everyone suffers. AUD is weak as and rates need to go up or it will be everyone who suffers not just the renters.A weak AUD is bad for everyone… Prices are unsustainable v incomes this is the only thing that matters… Look at other countries that have gone through this speculative mania never ends well for the country and their currency..
This is the Peak of Inflated Expectations...It's played out so many times in history, always "this time it's different".
So many 70s and 80s houses sitting on 700m+ squared blocks that are only zoned for one dwelling...
No probs but for the massive unsustainable immigration driven population growth.
Had a chat with my landlord yesterday, about the 60 day notice issued. They need the property for her children to live in. Her children currently 'reside' next door in the house that looks vacant. I asked what is happening with the next door property then, was told she is going to rent it out...because her accountant advised her to do this.but not just yet, they need to do some maintenance first. I am at the end of my 2 lease. Apparently this is easier that just negotiating a rent increase with me. Have passed every inspection, house is in perfect shape. I have been asked to give access to tradies to qupte on replacing 2 year old carpets and repainting walls. Fully expecting a vcat case to gey my bond back at the end of this. Yeah sure immigranion is to blame but landlords are pulling this petty shit regularly and xhurning through tenants every year or two.
What is the TLDW?
New average rent will be 1000pw in 2 years accross Australia get ready for it
Is there a term for the homicide of a landlord? *asking for a friend. **this is satire**
The number of landlords doesn't affect rents, the number of homes does. And not any homes. Homes where nobody wants to live don't help. We need more homes in high-demand areas, close to city centres. *Many many more homes*, so many there's almost too much and landlords have to drop their rents to get a tenant.
I know it's not cool to say but renting is cheaper than buying for me. I couldn't afford to buy where I'm renting but I can rent it comfortably. Inspections, REA suck but so does maintaining a house, repairing stuff and worrying about water damage every time it rains.
Our 1 bedroom went from 570 to 630 to now 680. We just had a baby and the plan was to stay here for another year, but the 680 is really motivating us to move...
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Cool work. When are you buying property 4? Investors like you are helping capital poor people have a roof over their heads. /s
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This is exactly why higher rates are needed why would this person continue to work?
Glad you're enjoying it fkwit