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Balfour Homes Blog

Still renting in 2022? Brace yourselves…

‘In case of emergency landing…rental crisis, lean forward, put your head between your legs and BRACE’… yourselves if you aren’t already considering getting yourself on the property ladder this year. 

 

With a downward trend of rental availability across Australia, the competition for accommodation sees rental prices flying sky high in 2022. Across Australia’s capital cities the median cost to rent has increased by 6.7% over 12 months, and 8.5% in regional areas.  

Rental stress

If those figures aren’t powerful enough to demonstrate the impact of this rental crisis, let’s consider the term ‘rental stress’ . The Australian Government defines rental stress as a situation in which a tenant is spending more than 30% of their gross income on rent.

Take a moment now to work out what 30% of your weekly income is and how much of that is paid in rent. Scary stuff right?

According to the Australian Bureau of Statistics, the average weekly income of employees across Australia is $1305 per week. When we do the maths, paying anything over $391 per week in rent would be deemed as ‘rental stress’. 

To put things into further perspective of where you may be reading from, below is a table showing the average income for a person living in each major Australian city and what percentage of their income is paid on rent based on the average cost of rentals in that same city. 

In March 2021, the average across all major Australian cities was still below 30%, however, with Domains latest rental data set (December 2021) the average has already surpassed 30%

Average weekly earnings House – Rent vs Earning % – December 2021 House – Rent vs Earning % – March 2021 Unit – Rent vs Earning % December 2021 Unit – Rent vs Earning % March 2021
Sydney $1,751.90 34.25% 31.40% 27.97% 26.82%
Canberra $1,890.20 35.71% 31.74% 28.04% 26.45%
Melbourne $1,718.50 25.89% 25.02% 21.82% 21.82%
Brisbane $1,615.40 29.71% 27.24% 26.00% 24.76%
Adelaide $1,542.60 29.17% 27.55% 23.34% 22.69%
Perth $1,840.50 24.99% 23.36% 21.19% 19.83%
Hobart $1,488.10 33.60% 32.26% 28.76% 28.22%
Darwin $1,703.70 35.22% 32.28% 28.17% 25.24%

 

Source: Average weekly income in Australia – Australian Bureau of Statistics. Average weekly rent in Australia – Domain Weekly Rental Report March 2021 & December 2021

 

The concerns continue…

As rent continues to increase faster than wages, and alarmingly is set to grow even stronger this year, the concerns for renters continue. A major concern is availability; we are seeing less vacancies and more viewings per listing. In the wake of the pandemic Australians overseas have returned to their once let properties and more people have stayed put as a result of limited travel. 

Additionally, international migration causing population growth as borders restrictions decrease, will lead to more people looking for dwellings in a market of limited affordable housing. 

Emphasis on the word ‘affordable’ as whilst travel will help boost the economy, it will also mean more competition for current renters, driving up the weekly prices of leased properties.

Furthermore, during the pandemic, many holiday rentals were added to the traditional market. But the return of travel, sees a restoration of these properties as holiday lets, further reducing the rental pool. 

Mayday, Mayday…

Fortunately, for anyone looking to buy, there are multiple emergency exits from the rental crisis. The specialists running the ship at Balfour homes have all the knowledge, trust, and expertise, to get you swiftly and successfully into your new home.

 

If you are just finding your feet again post-pandemic, have minimal savings or think home ownership is still a far away dream… Now is the time to call ‘May-day’!!

 

…and if that doesn’t work, picking up the phone and calling one of our specialists for a chat usually does. 

 

Let the Balfour team come to the rescue and devise a plan to find you a home that you can truly settle into.

 

References

 

https://www.domain.com.au/research/rental-report/december-2021/

 

https://www.abs.gov.au/statistics/labour/earnings-and-work-hours/average-weekly-earnings-australia/may-2021

 

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