The evolving COVID situation across the country has highlighted renters’ desires to live more remotely with new realestate.com.au data revealing rental supplies in regional areas are struggling to keep up with demand.
Total rental listings nationally fell to a new historic low in July after an 18.1% year-on-year decline, the largest annual fall on record. Regional areas recorded some of the largest declines in overall rental listings, falling by 24.9% year-on-year across Australia.
According to realestate.com.au director of economic research Cameron Kusher, this could be driven by several factors.
“More people have moved to regional areas and many of them haven’t necessarily purchased before making that move so demand for rental properties has increased,” he said.
“There are also a lot of people who have bought second properties which are either purely holiday homes or have been let short term rather than long term and, as a result, this has reduced the supply.
“Finally, former rental properties have been sold as prices have increased and the purchasers have not necessarily purchased for rental purposes, further reducing supply.”
Regional NSW recorded an 18.6% decline in overall listings when comparing July 2021 to July 2020. Regional Victoria had a 20.4% decline, and total listings fell by 27.9% in regional Queensland. The largest annual declines were in regional Northern Territory where total listings plunged by 61.8% and regional South Australia, with a 44.4% decline.
The data showed the number of overall rental listings were at record lows in July in Adelaide, regional South Australia, regional Western Australia and regional NT.
Supply unable to meet demand
“The competitiveness here is based on not having enough supply,” Mr Walton said.
“It’s not just tenants enquiring after properties, but businesses are also asking what’s coming up so they can employ casual shop assistants and even those in healthcare and hospitality workers,” he said.
“I know several businesses that have not been able to operate at their usual capacity because they can’t get casual workers up here.
“It’s been a problem here for over a year and unfortunately there doesn’t seem to be any state government action around it.”
The drop in overall listings in regional areas is being exacerbated by a lack of new listings coming onto the market, as fewer tenants vacate their rentals.
The total number of new listings in regional areas fell by 12.3% year-on-year and vacancy rates are at all-time lows in many regional towns, including Daylesford, which was at 0% in July according to SQM Research data.
Australian Bureau of Statistics data showed more people moved to regional areas from the capital cities in 2020, driven by the COVID-led shift to lifestyle and regional areas. About 190,000 residents moved from regions to capital cities last year, 24,700 fewer than in 2019.
Mr Walton said a big issue is that many regional towns, including Daylesford, don’t have the housing supply to accommodate the increased demand, with houses outnumbering apartments.
“If you went into the Noosa Shore, or the Byron Shire, and said you wanted to build 20 apartments, there would be a lot of upset among locals, but the reality is if those apartments were built for healthcare workers, retail workers or hospitality workers, that would certainly be a benefit to the community.”
Coastal regions are also showing declines in rentals with the Gold Coast recording a 45.1% fall in total rental listings year-on-year and a 41.3% drop in Cairns.
Renters have more to choose from in the city
In contrast to regional Australia, many inner-city landlords have found themselves without tenants.
Inner Melbourne had the highest proportion of new rental listings in July 2021 at 9.2% of national new listings and the highest proportion of total listings at 12.3%.
Martin Sizer, head of property management at Nelson Alexander, explained that the inner-city Melbourne rental market, particularly apartments, had been heavily impacted by the pandemic.
“The rental apartment markets have been affected particularly hard in certain areas such as the CBD and Carlton, as the COVID travel restrictions prevent the usual reliance on international students occupying apartment complexes in these areas,” he said.
“Despite the pandemic-driven challenges to the rental market, vacancy rates across Melbourne have shown slow signs of improvement when lockdown restrictions have eased, but further improvements will be reliant on the current COVID restrictions being eased.”
New rental listings are also increasing in some cities, giving renters more choice when searching for a home.
Brisbane Inner City had a 6.4% rise in new listings in July 2021. It has both the largest supply of new and total rental stock in the city, accounting for 29.9% of Brisbane’s new listings over the month.
Hobart also recorded a monthly increase in new rental listings, rising 2.4% in July.
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