RENTERS have had fewer properties available to them in the past three months amid fears property taxes are making it less attractive to be a landlord.
The REA Group’s PropTrack rental report for the June quarter found new listings on realestate.com.au dropped by 13 per cent year-on-year in regional Victoria, with total listings also seeing a 4.9 per cent decline since June 2023.
The median house rent in Swan Hill was $410 per week based on 139 rental listings in the past 12 months, according to realstate.com.au – an increase of 8 per cent.
On the same website, there were just six properties available to rent in the rural city as of yesterday, ranging from $400 to $440 for two- or three-bedroom homes/units.
Despite shrinking supply, rental prices remained unchanged in regional Victoria over the quarter at $450 per week – a 4.7 per cent rise from a year earlier.
Ray White Swan Hill selling principal Cameron Smits said it was becoming less attractive to be a landlord in Victoria due to increasing land tax imposed by the Victorian Government and hundreds of changes to rental legislation.
“We are seeing more and more rental providers sell residential rentals because the costs of keeping them outweigh the benefits,” Mr Smits told The Guardian.
“Rental providers are choosing different investment strategies, with some even choosing to invest across the river.
“A large percentage of Swan Hill’s rental providers are ‘mum and dad investors’ who owned that home and worked hard and saved over a long period of time to eventually buy a second home that was maybe slightly bigger or newer.
“They managed to keep the existing home as an investment strategy.
“When the costs of keeping it continue going up, something has to give.
“Because of the state’s changes we are seeing rents increase dramatically to keep in line with costs or landlords sell the investment off, creating a further shortage in the market.”
Mr Smits said despite having no “crystal ball”, he expected the next six months would get tougher in the rental market.
“With major projects earmarked for our region, there is nowhere to house this new workforce that will be needed to run these projects,” he said.
“They will compete for the existing rentals.
“Our vacancy rate is 0 per cent … it’s going to take a lot of homes to fix that.”
PropTrack director of economic research Cameron Kusher said as rental price growth had slowed over the past year, the 9.1 per cent increase since June 2023 remained “substantial” and “significantly” exceeded both the rate of inflation and household income growth.
“Weakening rental growth likely reflects the trade-offs that renters are making due to the heightened cost of rent and living,” Mr Kusher said.
“Some of these trade-offs may include renting smaller properties, renting in less desirable locations where rental costs are lower or sharing rental accommodation with other tenants.
“Increased lending activity to first-home buyers has seen renters with the means exiting the market to purchase, while increased lending to investors will also likely alleviate some rental pressures.
“However, the supply of homes available for renters still consistently trails the demand for rentals, with this imbalance being persistently exacerbated by limited new housing construction and a heightened number of investors exiting the market in recent years, with the rebound in investor purchasing only being witnessed over the past year.”
The report found national rents remained unchanged over the quarter, at an average of $600 per week in June 2024.
However, they have increased by 9.1 per cent, or $50, since June 2023.
In June 2024, the number of new rental listings on realestate.com.au was 4.7 per cent lower than a year earlier, and at its lowest level for the month of June since 2010.
Total rental listings increased by 10.7 per cent over the June quarter.
Despite this, conditions remained tight as stock was 4.4 per cent lower year-on-year.
