What happened to all the rentals?

I still can’t get my head around this puzzle…

Where did all the rental properties go?

Have you seen them? I’m sure I put them down on the kitchen bench a minute ago, I’ve checked behind the couch… I just can’t find them anywhere.

Seriously though, what happened to them?

Prior to Covid, there was a pretty consistent 75,000 to 80,000 rental properties available to rent on the market at any one time.

Today, there’s less than 40,000.

That is, the number of rental properties on the market has halved.

That’s insane.

And as a result, the vacancy rate has fallen from an already pretty tight 2 to 2.5% down to under 1%.

That’s also insane.

But with the collapse in rentals and vacancy rates, we’ve got the makings of a rental crisis:

Australia’s rental crisis deepened through May as national vacancy rates fell from 1.1 per cent to 1 per cent, the lowest level in 16 years, and there is every chance they will fall again during June, SQM Research shows.

“Rental vacancy rates continued to tighten across the country and there is nothing yet in the data to suggest a reprieve,” said SQM managing director Louis Christopher.

Australia’s national rental vacancy rate has hit 1pc, the lowest it has been since 2006. Peter Rae

“The national rental crisis continues on unabated and as a result rents are skyrocketing.

“Sydney combined rents have risen by 17.5 per cent over the past 12 months, Brisbane is up by 18.6 per cent over the same period and Melbourne is up 14.8 per cent.”

Average capital city weekly rents in Australia are now $654 a week for houses and $473 for units.

Most concerning for prospective renters is that SQM’s report showed housing availability is worse in many markets than the headline figures indicate with rental vacancy rates well below 1 per cent in every city except for Sydney and Melbourne.

In Adelaide, rental vacancy rates are now 0.3 per cent, followed by Hobart (0.4 per cent), Darwin (0.5 per cent), Perth (0.6 per cent) and Brisbane (0.7 per cent).

Melbourne has the highest vacancy rate of all capital cities at 1.7 per cent, down from 1.9 per cent, while Sydney vacancies fell to 1.5 per cent.

Mr Christopher said it appears inevitable listings will tighten further and fall below 1 per cent before the cycle scrapes the bottom.

“We could break 1 per cent even as early as June – it’s possible,” he said.

“If not June, then the probabilities increase it will be in July because in all of this, we’re seeing nothing right now to suggest that we’re about to see a rise in rental listings – there’s just nothing there.”

I still don’t really get this.

Yes, maybe people spread themselves out more during Covid, so we needed more housing for the same amount of population.

But Covid is quickly becoming yesterday’s news.

Feels like there must be something else going on here.

But what?

JG.