The rental squeeze

The rental squeeze

It’s easy to be sceptical about reports of Sydney’s rental squeeze. After all, Sydney’s not an easy place to hunt for a house at the best of times, and it always gets tighter around the start of the university year, when suburban students move to the city. Some might also remember a time, before the 2000 Olympics, where it was common to attend an open inspection with the first month’s rent and the bond to pay on the spot, in cash.

But there seems to be more than just another news story this time around. The Real Estate Institute of NSW’s new vacancy rates figures show a serious shortage in available properties -“ an historic shortage, in fact.

The vacancy rate for February was just 1.4 percent, the lowest since the Institute started collecting this information. In popular gay neighbourhoods around the inner city, the news was even worse, with a vacancy rate of 1.3 percent.

I was responsible for finding a tenant for a particularly small, unrenovated property in the inner west recently. Of the 50 or so people who responded to my online ad (that was placed for 24 hours), 15 lodged application forms, and some provided shocking stories of how much pressure they had faced finding a property.

Several had been asked to leave rental properties because the owner needed to move back in. Others had been priced out of their current rental properties by landlords putting the rent up by $40 per week or more. And some -“ employed, decent people -“ were actually facing homelessness.

But a consistent theme came through from almost all of the house-hunters: They were all saving to buy property within the next 12 months. The rental market was no longer considered an easy option for low to medium wage earners, who were seriously considering the value of purchasing a first home.

Of course there are significant benefits to buying at the moment. The market is currently sitting at what experts call flat, which, at least anecdotally, translates to good for a bargain. The first home-buyer’s grant and stamp duty exemptions will probably not be available forever and, for the moment, provide significant savings.

But what about those people who really can’t afford the property prices in Sydney, or anywhere else in Australia for that matter? Or those people who are not willing to sacrifice their lifestyle for a crippling mortgage?

The Real Estate Institute of NSW has called on political parties to step up.

The situation continues to deteriorate, which proves it is a myth that there is no problem, Institute president Christine Castle said. What are politicians doing to reassure people that they have plans to alleviate this?

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