STRUGGLING to find a rental property in the area? You’re not alone, with tree changes, COVID implications and rising costs creating the perfect storm for a rental property shortage in regional Victoria.
According to realestate.com, there have been vacancy rates as low as zero in some parts of the state.
The average cost of rent in Northern Victoria also saw an increase of more than six per cent around April 2021, after the suspension on evictions and price hikes during COVID ended. In the following two weeks, rent then jumped around another three per cent.
Swan Hill local real estate agent Noel Watson is empathetic towards tenants on the lookout for a place at the moment, with wait times varying anywhere from two weeks to two months, with even longer wait times for those looking for something more specific, like a four bedroom house. The range of properties available is also very slim.
President of the Real Estate Institute of Victoria Adam Docking believes the worst of this rental shortage is still yet to come.
“I would say we probably haven’t seen the full extent of it,” he said.
New rental laws introduced recently have made an impact on the amount of rental properties available. In late 2020, the Victorian government passed the Residential Tenancies Act (RTA), which some landlords have found difficult to comply with, particularly around urgent repairs and maintenance to their properties.
Mr Docking believes the cost of owning and maintaining a rental property is becoming too much, and a lot of landlords are opting to get out and cash up.
“The cost of being a landlord is so onerous now with hikes in land tax, with stamp duty, so obviously there’s no incentive for a landlord to buy an investment property with stamp duty so high,” he said. “And then to maintain a property, there’s land taxes gone up through the roof as well and everything like that.”
Another factor Mr Docking believes is playing a big role in the shortage is the amount of city people moving out to the regions.
“People have fallen back in love with the regions,” Mr Docking said.
“So conversely to there being a lack of supply, demand is higher as well, and we are seeing there’s people moving into the regions and there’s some people that are probably a little bit tentative to pull the pin and buy, so they might think, ‘we’ll rent for a short period of time to see if we really like it’, so all of a sudden there’s more demand for good rental properties.”
So how does this rental shortage get better?
“We’ve got to change the psyche that a property investor is a rich, mega landowner. The vast majority of investors are your quintessential mum and dad investors who are just planning for their future,” Mr Docking said.
“We actually have to start looking that a landlord is actually doing a social service as well. I mean it’s not politically beautiful to say that, but the reality is, without landlords, there’s a lot of people that don’t have a home to live in.”
