According to the latest data from Australian Property Monitors rents continue to go up across Australia, and this is causing severe stress for many families. According to the Queensland Council of Social Services, even families with full employment are finding it tough, with some families forced to part with over 50% of their household budget just to pay the rent each week.
Ordinarily when rents start to get too much people will make the jump to home ownership, thereby lessening demand on the rental market. But in the current climate interest rates are so high that many renters simply can’t afford to take out a mortgage.
“The combination of Generation Y leaving home, strong migration patterns and a weak building sector is intensifying demand.
“The shortage of affordable accommodation will no doubt add to the growing number of displaced renters who cannot afford to live in well-located areas.”
– Australian Property Monitors general manager Michael McNamara
Rents continue to be well below property prices, and it looks like they would have to rise at least another 20 per cent, based on current real estate prices, before rental prices and property prices are on par with each other. The one positive is that property prices are falling, quite dramatically in some places, and that may be the one saving grace. If real estate prices go down, then property investment might become appealing again.