THERE are growing fears that the housing rental crisis will force tenants to start leaving regional Victorian communities.
A recent analysis of rental vacancy rates in regional Victoria, conducted by Everybody’s Home, the national campaign for real housing solutions, shows that tenants in regional areas are most vulnerable to rent increases, as landlords look to recoup the cost of rising interest rates.
Everybody’s Home spokesperson Kate Colvin said these increases and low vacancy rates would likely lead to renters moving out of their communities.
The Everybody’s Home data showed that Northern Victoria as a whole had a vacancy rate of 0.72 per cent, lower than Gippsland (0.78 per cent) and Mornington Peninsula (0.95 per cent), but higher than North East Victoria (0.47 per cent) and South Western Victoria (0.69 per cent).
It was found that rental prices in Northern Victoria had also risen by 6.2 per cent in the past 12 months.
Ms Colvin said due to the current low vacancy rates and rising rental values, housing options were becoming limited for many families and individuals.
She said this could influence individuals who live in regional areas with low vacancy rates, such as those located in Northern Victoria, to move to locations that provide more variety and choice.
“There are limited options for people who can’t afford to buy that want to stay in their local community,” she said.
Ms Colvin said if families and individuals were to leave, communities would lose workers and valuable members of the community.
“Just because you rent, doesn’t mean you haven’t established deep roots in a community,” she said.
“Renters on low and modest incomes work in the local shops and aged care service, they have kids in local schools, are members of sports clubs, and attend local churches.
“They deserve the same stability as everyone else.”
Ms Colvin said planning for more social and affordable houses was needed now to help ease the rental crisis.
“A dip in construction starts is forecast for next year and that’s a great opportunity for the government to swing in and take up the slack in the industry,” she said.
“The bitter fruit of a decade of housing neglect is with us now and is being unfairly forced on low-income renters. This problem will only get worse if we fail to act.”
Meanwhile, the North West region has recorded a higher monthly decline in house prices of 0.64 per cent in July.
PropTrack’s report stated that rising interest rates were the cause of the price falls, as potential buyers became hesitant, anticipating further interest rises.
Ray White chief economist Nerida Conisbee said a slow down would help first home buyers break into the market.
“Many first home buyers feel increasingly locked out of the housing market, particularly those that can’t rely on help from family,” Ms Conisbee said.
“Lack of affordable housing is a challenge for government at all levels, it’s expensive to fix using tax incentives and politically unpopular to use planning policy.”
The North West still boasts strong affordability, as the median house price sits at $389,000, considerably lower than Melbourne’s $800,000 and regional Victoria’s $610,000.
CoreLogic’s monthly figures highlighted a national rent rise of 0.9 per cent in July and 9.8 per cent over the past twelve months.
CoreLogic’s Research Director Tim Lawless said the rental market was tight, as vacancy rates were low across many parts of Australia.
However, he said with rents rising faster than property values, yields would be consistently improving for investors.
“Such tight rental markets, improving yields and stronger buying conditions should help to keep a floor under investment demand,” he said.
