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Date Published : Wednesday, April 30, 2008
The current housing shortage across Australia - combined with high interest rates on home loans - means that rental conditions are at near record high levels, according to a new study.
Rapidly increasing populations - especially around capital cities - have led to a housing shortage which requires at least 20,000 more new homes needing to be built each year to meet current demand, research by the Housing Industry Association (HIA) found.
High interest rates on mortgage products - fuelled by a high base rate set by the Reserve Bank of Australia - means that many Australians are turning top rental properties. The shortage in available homes means that rents are now at their highest level for two decades.
The property shortage has led to rental vacancies dropping to around 1.5 per cent from a 20-year-long average of 3.5 per cent.
A HIA spokesman told news.com.au: "Until this shortage is overcome we will continue to see acute shortages in affordable housing in both the rental and purchaser markets."
The news provider reports that the Reserve Bank of Australia puts the current shortage of rental properties down to the fact that even though rents have been rising, they still have not kept pace with rising house prices, making property a less attractive investment option than it was a decade ago.
Recently, three of the country's major banks increased interest rates charged on its variable rate home loans as a result of the credit crunch - possibly further taking them out of the reach of first-time buyers.
ANZ, National Australia Bank and Westpac all increased rates ahead of the May base rate decision by the Reserve Bank.
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