Australia could be on the verge of another rental crisis, with Perth expected to be hit the hardest, Australia’s largest property developer says.
Stockland managing director Matthew Quinn said suburban Perth had been one of the softest residential property markets in Australia, but the rental vacancy rate within Stockland projects had fallen to less than one per cent, meaning there was almost nothing available.
“Rents are going through the roof, just ask anybody who’s tried to rent a house in Perth in the last six months – it is a nightmare,” Mr Quinn told a property lunch in Sydney on Tuesday.
Despite falling house prices, the phenomenon of increasing rents was occurring around the country.
“The next thing you’ll see because of the housing shortage and people being forced to rent because they can’t afford to buy is you’ll see a potential rental crisis,” Mr Quinn said.
He predicts queues of house hunters will soon be seen at rental inspections, leading people to pay more to lease a property.
“It’s already happening and it’s going to happen in greater and greater numbers because housing is undersupplied, it’s unaffordable and rents are now going up.”
This cycle would be maintained while planning policies, government taxes and population growth continued to be poorly co-ordinated between all levels of government, he said.
Australians continued to live in the largest homes in the world but the $500,000 average price tag for a home did not match the average affordable loan of $329,000.
Stockland also says there is a growing disparity between first home buyers who are able to borrow money from their parents and those who need to apply to corporate lenders.
Many baby boomer parents were fearful their children would not be able to afford somewhere to live.
“It’s crisis that spurs action, but ultimately it goes too far before people act.”
Stockland believes overall housing market conditions will continue to be “quite poor” after cutting its full year earnings guidance in March.
The company blamed high interest rates and wet weather for slowing property sales.
Bank decisions to implement out-of-cycle interest rate increases had led people to pull out of the marketplace, something which would become evident in data releases over the next eight months, he said.
“In all my experience in the residential industry for over 20 years I have never seen such a material dip in sentiment than I’ve seen over the last month to six weeks.”
