Rental Crisis, Rents Spiral Out Of Control

[BribieG]

Daughter from Cairns is coming down to live with us so we need larger place. Current 3 (tiny) br place is too small so last week I walked into an agent. Perfect property available, 4br 2 bath house 2 streets from the beach. Solahart hot water, split system air, two lounge areas, outdoor BBQ enclosed patio for $300 pw.

Signed up in 24 hrs, nobody else has put in an application although it has been advertised for a month.

Informed current agents we would be leaving but gave them a month's notice because that's when the current lease runs out.

Our present unit is now being advertised on the web. Our current rent $240 pw. With the current horrendous rental market (according to the media) the chances of renting such a properety for $240 is total history, like petrol for 90 cents a litre. Guess what exhorbitant rent they have put it up to?

Brace yourselves for this.

http://www.harcourts.com.au/listing/detail...R&id=125264

oops that's a huge url hope it works!

I know this is anecdotal but shyte the media must be totally grasped by the ba&&s by the real estate self stimulators. Actually when handing in notice I asked the rental manager if we could get out early to avoid paying an extra months' rent and she said 'probably not because it's slow at the moment and properties are sitting" Nuff said.

Edited June 19, 2008 by BribieG

[(ツ)]

I'm surprised the rent for the new place isn't higher considering the huge jump in size. $300 a week looks pretty good.

Are places selling well in the area?

[BribieG]

I'm surprised the rent for the new place isn't higher considering the huge jump in size. $300 a week looks pretty good.

Are places selling well in the area?

I used to work in real estate, where the market is always great, homes are always selling well and Now is the time to buy before it's too late

Another thing I noticed when in R.E. is that in outer Brisbane suburbs, rentals seem to be in a very narrow band for some reason. You can rent a dogbox for $250 and a mansion with a pontoon onto a canal for $450. I think it is to do with the location location location. Bribie is a 60k round trip from Kmart, railway station etc. so rentals are a lot cheaper but the actual property purchase prices is higher as most purchasers are retirees (a bit like NSW Central Coast).

Heaps of houses for sale in Brisbane as a whole at the moment, according to the Courier Mail current listings have almost doubled in the last year.

buyer's market.

[jayweb]

I used to work in real estate, where the market is always great, homes are always selling well and Now is the time to buy before it's too late

Another thing I noticed when in R.E. is that in outer Brisbane suburbs, rentals seem to be in a very narrow band for some reason. You can rent a dogbox for $250 and a mansion with a pontoon onto a canal for $450. I think it is to do with the location location location. Bribie is a 60k round trip from Kmart, railway station etc. so rentals are a lot cheaper but the actual property purchase prices is higher as most purchasers are retirees (a bit like NSW Central Coast).

Heaps of houses for sale in Brisbane as a whole at the moment, according to the Courier Mail current listings have almost doubled in the last year.

buyer's market.

Here too BribieG, for a few weeks running our local rag has been bragging about how the "realtor" (our real estate lift out) has been the biggest edition ever....thats not good for business!!!!

Our local area here was reported to be down 20% since the beginning of the year.....our neighbours house was on for $650K, then $575 now $550.....no bites yet.....all since christmas

[momaw]

anecdotal is right. The apartments I live in have some for sale and the seller is giving a written guarantee of $420 a week for a 2 Bedroom.

Rents are out of control in a lot of the country for many reasons.

[Nevyn72]

Seems to be very location based BribieG.....

Where my investment property is (which I am currently selling) rents have increasd by around 20% in the last 12 months!!

[swordfish805]

anecdotal is right. The apartments I live in have some for sale and the seller is giving a written guarantee of $420 a week for a 2 Bedroom.

Rents are out of control in a lot of the country for many reasons.

Some areas of Sydney and Melbourne are pretty hot - and there is only one reason for it. Supply and demand. I believe the annual migrant intake for this year is the highest on record, and of course John Howard had them streaming in the door to make up for his lack of investmen in training over the previous 10 years.

Bring 100,000+ people a year into the country, they have to live somewhere. Most want to be in Sydney or Melbourne - who is surprised if rents increase. Ipso facto.

[BribieG]

Some areas of Sydney and Melbourne are pretty hot - and there is only one reason for it. Supply and demand.

Talking to my Brother in Law at Beacon Hill in Sydney's Northern Beaches the other day, they have friends at Belrose in Northern Sydney who are paying over $600 a week for a 3br house. Ridiculous.

Now, not wishing to sound racist but here in Brisbane, when I travel in to town on the train I notice that at a couple of stations a lot of Ethiopian-looking African and Indian/Pakistani people get on to the train. This is an area which services quite a few of the outer Brisbane housing commission areas and I suppose that public housing is being allocated to these immigrants.

Lets face it the poor buggers have obviously come from horrible conditions at their previous homes and I'm not suggesting that they should be denied the opportunity of living a new and decent life in Australia . However the question is: are Australian families and individuals being kicked off the list to make way for refugees and immigrants?? Room seems to be made for them, but as a renter myself, I don't know of any Government department who would go out of their way to prevent me and my partner from ending up living in a car.

Charity begins at home????

Signed: Australian Taxpayer

Edited June 26, 2008 by BribieG

[azure1503559508]

Bribie, it appears you need to be homeless . . .out on the street before you're eligible for any type of assistance by the Housing authority down here in NSW.

As for the situation up there, I assume it based on how you would fare out in the private market.. you know, your command of the English language, etc. I gather other issues like reliance on public transport and proximity to support groups are taken into account.

I don't advocate that Public housing replaces the private investment market although I do argue that there is a need for greater public housing, as the private market is not "providing the goods."

Also, the rate of rent assistance must be reviewed, and the assistance should be extended to full-time students.

You may find this article interesting;

Fixing politics: the housing affordability crisis

The need for a roof over one's head is a fundamental human requirement, as Abraham Maslow famously pointed out. It's also a problem reaching crisis proportions in Australia, where there are over 800,000 in housing stress and as many as 100,000 people living on the streets.

Housing affordability in Australia is one of those big, complex issues that governments find so difficult. As experts like Julian Disney, who headed the National Summit on Housing Affordability, point out, the crisis has been building for close to 20 years now. But little has been done. One day very soon, our major cities may end up like Karratha in north-west Western Australia, where the bulk of the labour force has to be flown in and out weekly.

Why are our house prices so high? The answer is essentially a conspiracy between governments, landlords and home-owners which has created an asset price bubble in housing. Since 1999, cheap money, rising wages, high levels of immigration and massive tax concessions have jacked up housing demand. The resultant price rises persuaded huge numbers of average Australians to gamble their future on rising property prices. Housing is now very over-valued, in terms of both average wages and the yields on rental properties.

This is why rents are rising: investor-driven demand has radically outstripped supply, especially for cheaper homes not too far from city centres. The losers are renters, first-home buyers and young people. Macro-economically, rent is nothing but a wealth transfer from poorer, younger Australians to their richer, older compatriots.

It's a crisis of politics as usual. Politicians love nothing better than to talk about home ownership and "the Australian dream". They also fear the power of the property lobby. So we end up with a celebration of home ownership as the best and only form of providing shelter. Australian governments spend a minuscule amount on public housing, but give away tens of billions in tax concessions to investors. As the recent Senate Committee on Housing Affordability reported: "the combined total of capital gains tax arrangements, land tax exemption and negative gearing arrangements is estimated to be in the order of $50 billion per year."

That's a lot of money which could be used to provide cheaper housing.

But Paul Keating's changes to negative gearing in the 1980s badly burned the Hawke Government, and Labor hasn't gone near the issue since.

Housing policy in Australia cuts across government jurisdictions. For decades the Commonwealth has washed its hands of urban policy. Meanwhile the states have come to rely more and more on property taxes like stamp duty to fund essential services. Local councils have turned to development charges and higher rates to help pay for the infrastructure burden imposed by new tracts of housing. These charges are passed on to home buyers and renters.

Our urban planning is also a mess. Australian cities are amongst the least dense in the world. But the property lobby's preferred "solution" is releasing more land on the urban fringe. It won't work -- because people don't want to live that far out, and increasingly can't afford to commute either. Providing infrastructure across hundreds of klicks of suburban sprawl was already expensive before the current oil squeeze. With fuel prices spiking and state and local governments struggling to provide new infrastructure, it's looking prohibitive.

Are there any solutions? Yes, actually.

The Federal Government can start to wind back the huge tax breaks for wealthier property investors and homeowners, and use the money saved to invest more in public housing and rental assistance. State and local governments can continue to plan for denser cities, despite the opposition of lobby groups like the Property Council. All governments can invest more in urban infrastructure -- particularly public transport. Government departments could be moved out to regional towns. And, as citizens, we can also aspire to live in smaller homes. At the same time as housing affordability is worsening, the number of Australians living in each dwelling is falling.

http://www.crikey.com.au/Politics/20080626...ity-crisis.html

Edited June 27, 2008 by azure

[James240]

I don't think migration, while its of course an issue given recent migrants (as anyone in their situation would) head straight to the big cities as that's where the jobs are, cannot really factor in. Australia takes in much less migrants than Europe and North America (have you been to London recently?) and we need to as our birth rate is declining. There are so many factors to consider in the housing 'crisis' that's it hard to pin point any - one that is rarely mentioned is how much the baby boomers stuffed things up by not planning ahead. Maybe we need to get over the quarter acre block paradigm and realise we'll be living in shoe boxes in the big cities!

To be honest, I hope the economy slows down a fair bit more and the housing market has more of a reality check. Rent assistance / public housing (while I'm not a conservative) I doubt is really on the political agenda as Rudd I'm sure realises he was not voted in for his socialist ideals (given politics are dictated by middle class, hard working Australians who'll swing their vote tomorrow if they hear of a return to welfarism. IMHO of course)

[azure1503559508]

Govt rental scheme will help older Australians: Plibersek

Federal Housing Minister Tanya Plibersek says the Government's National Rental Affordability Scheme will help older Australians suffering housing stress.

The scheme will fund tax incentives for investors to build new rental properties, reducing pressure on the market.

The Council on the Ageing, the Brotherhood of St Laurence and Aged and Community Services Australia are holding a forum on the issue in Canberra.

Ms Plibersek has asked the groups to nominate people to work with the Government to improve housing services for the elderly.

She says the rental scheme will assist older people struggling to afford housing.

"We know that older Australians are doing it particularly tough in the rental area at the moment; many of them have had a series of rent increases because rental vacancy rates are so very low at the moment," she said.

"Older Australians will benefit in particular from this scheme."

http://www.abc.net.au/news/stories/2008/07...?section=justin

[azure1503559508]

Rental squeeze leaving uni students in the cold

A survey by the University of Melbourne has found that the rental crisis is hitting university students particularly hard with many struggling to find affordable accommodation close to their campuses.

Now universities and students like 21-year-olds Maddie and Michael are now calling for a boost to government income support to help students cope with a tighter rental market. . .

http://www.abc.net.au/news/stories/2008/07/02/2292312.htm

[swordfish805]

Rental squeeze leaving uni students in the cold

A survey by the University of Melbourne has found that the rental crisis is hitting university students particularly hard with many struggling to find affordable accommodation close to their campuses.

Now universities and students like 21-year-olds Maddie and Michael are now calling for a boost to government income support to help students cope with a tighter rental market. . .

http://www.abc.net.au/news/stories/2008/07/02/2292312.htm

The stories of cockroaches and vermin in the bedrooms remind me of my time as an undergraduate. I went to UNSW like the people in that story, wonder if it is the same house?

I can't help feeling a little nostalgic, but really, nobody should have to live in poverty just to get an education. Our prisons are probably provide better accommodation than a lot of student digs - and the flatmates might be on a par.

[James240]

Rental squeeze leaving uni students in the cold

A survey by the University of Melbourne has found that the rental crisis is hitting university students particularly hard with many struggling to find affordable accommodation close to their campuses.

Now universities and students like 21-year-olds Maddie and Michael are now calling for a boost to government income support to help students cope with a tighter rental market. . .

http://www.abc.net.au/news/stories/2008/07/02/2292312.htm

Poor Maddie and Michael

Let me get this right? 4 bedrooms at $550, they're sharing a room = about $70 a week for our poor couple of future scientists.

Then poor Michael tells us he has to get a cash in hand job - which no doubt he does not declare (illegaly) to supplement his $200 per week from the government. Let's assume poor Michael earns another $200 a week from his *hush hush* job, that's $400 a week.

The poor couple also tell us they're living in one of Sydney's priciest and sought after areas - the inner west.

Where's the violin? I mean how does he get by on 400 bucks a week minus 70 for rent (assuming good young Michael spends the rest of his free time studying / in class)...

[swordfish805]

Poor Maddie and Michael

Let me get this right? 4 bedrooms at $550, they're sharing a room = about $70 a week for our poor couple of future scientists.

Then poor Michael tells us he has to get a cash in hand job - which no doubt he does not declare (illegaly) to supplement his $200 per week from the government. Let's assume poor Michael earns another $200 a week from his *hush hush* job, that's $400 a week.

The poor couple also tell us they're living in one of Sydney's priciest and sought after areas - the inner west.

Where's the violin? I mean how does he get by on 400 bucks a week minus 70 for rent (assuming good young Michael spends the rest of his free time studying / in class)...

Live at home do you nik?

[James240]

Live at home do you nik?

Why? Do you?

Lived out of home for most of my undergrad, ditto for further education...

Of course there's no plasmas, or trips to Paris, but what do you expect...

[MACCA350]

The only reason we've stayed in the same place for the last 7.5 years is because in that whole time the rent has only had 1 increase of only $10.

It's a 3 bedroom small house on a 620 square block in Fawkner VIC with a current rent of $175 per week

Our house in Brunswick is up for auction(it's had a feeding frenzy from developers already ) in a couple of weeks and we've been advised to wait till the end of the year before we purchase the house we plan to live in.........but I tell you what this house has become way too small for us so it's going to be hard to hold off. Although I've been watching the market and I've already noticed a drop in pricing in some areas so hopefully there should be some bargains around in the near future.

As they say one persons pain is another's gain..........it's a cold hard truth, and sometimes there is a small amount of luck as to what side you find yourself on.

cheers

[MACCA350]

Just sold our property yesterday, really happy with the result.....well above both the median and upper quartile for the suburb

Found this about the Melbourne Median price while hunting around

clicky

The REIV March quarter median prices confirm that the four successive interest rate increases over the last 8 months has had an impact on Melbourne house prices.

The median price for a detached home in Melbourne in the March quarter is now $432,500, down 8.4 per cent from the December 2007 median of $472,250. Over the same period, the median price for a unit/apartment decreased from $385,000 to $370,000.

Melbourne Median price graph

Looks like there was a massive boom from March - December 07 which has already started dropping since January this year. Anyone know when REIV release the figures for the second quarter? Will be interesting to see if that trend has continued.

cheers

Edited July 13, 2008 by MACCA350