Australia could be set for record-high increases in rental income as property shortages across the country drive up prices, according to a property researcher.
Propertyology’s head of research, Simon Pressley, believes that even a fall in migration due to border restrictions will not offset the number of dwellings Australia needs.
“The reality is that Australia does not have enough housing supply for its existing 25.6 million population,” Mr Pressley said.
“Propertyology is predicting that these next couple of years will produce the biggest increase in rents that Australia has seen in living memory.”
The researcher believes securing a standard rental property over the next couple of years could cost households an extra $2,000-$5,000 per annum.
According to data by SQM Research, Canberra ($648 per week), Sydney ($638) and Darwin ($580) have the highest capital city advertised medians rents for houses.
Hobart rents have increased the most over the last decade at $456 per week.
Mr Pressley said most of Australia had an undersupply of housing for sale and for rent prior to COVID-19.
“While this germ has managed to cause quite a bit of inconvenience for Australian lifestyles, no germ has the ability to dump thousands of extra dwellings out of the sky. In other words, Australia is still undersupplied,” the researcher stated.
However, despite the majority of Australia geographically facing shortages of properties, Mr Pressley stated Sydney and Melbourne are likely to see rental reductions due to a fall in migration.
“As at the end of October 2020, there were a combined 53,525 dwellings advertised for rent for Sydney and Melbourne combined population of 10.5 million people,” he said.
“The remaining 15.1 million Australians are competing in bidding wars for just 20,696 dwellings in the other six capital cities and the increasingly popular regional wonders,” Mr Pressley concluded.