“There are simply not enough investment properties available to meet the demand from renters,” said REINSW President Cristine Castle. “This is already causing rents to rise. Unless the NSW Government addresses the problem, renters will suffer more than home owners did from last year’s interest rate rises.”
REINSW is calling for the NSW Government to abolish land tax on residential properties in a bid to encourage investors back to the property market.
“We urge the major political parties in NSW to take this policy on board in the lead-up to the state election on March 24,” Mrs Castle said.
REINSW conducts a rental vacancy survey each month on how much accommodation is available for tenants. A figure below 2% indicates a tight market. The survey for November shows a vacancy rate of just 1.6% in Sydney, with low figures around the state.
This is already translating into rent rises, with the most recent figures from the NSW Department of Housing showing a 7.1% jump in rents for units and a 6.4% rise in rents for houses in Sydney in the year to September 2006.
REINSW members are noticing the rent increases in their local areas, with comments including: “Demand is exceeding supply to the extent that we are recommending our owners increase rents by as much as 10% for houses and townhouses and 5%-7% for units” and “Vacancy rates are very low with people staying put rather than vacating and taking the risk of not finding a property or having to pay much higher rents.”
Mrs Castle predicts the situation to worsen this year as there aren’t enough new properties being built to meet the demand, with new dwelling approvals for NSW continuing to fall.
“The state is on the verge of a rental crisis,” Mrs Castle said. “We can’t just sit back and wait for rents to rise in the hope that the improving yields will eventually lure investors back to the property market. If we do nothing, families will have nowhere to live.”