Property Club is appealing for urgent action from the Federal Government to address the vast rent inflation which, if not taken care of, will become a major crisis.
Rent inflation is set to explode in the coming year with the nation on track for 650, 000 new migrants to arrive during a time of famine in rental properties.
Australia’s cities are already struggling to provide enough rental accommodation for its current population, making them ill-equipped for the huge influx of migrants expected.
“Vacancy rates are already at near record lows in many parts of Australia, and as a result, rents have been increasing at more than 20 per cent,” said Kevin Young, President of Property Club which is Australia’s largest independent group in property investing.
“Property Club is predicting that if the Federal Government does not act quickly to boost the supply of rental houses, then rents will increase even higher over the coming year, and the number of homeless people will explode.”
Mr Young stressed that this issue needs to be addressed and has suggested two policy changes that are urgently needed to prevent this pending crisis from becoming a full-blown disaster.
“Property Club is calling on the Federal Government to reinstate depreciation benefits associated with owning second-hand properties that were abolished in 2017. This stupid policy move resulted in property investors not buying cheaper second-hand rental properties that could now be offered to renters crying out for affordable rental properties,” Mr Young said.
“We are also calling on the Federal Government to reinstate interest-only lending without time limits for property investors. This equally stupid policy move by the Australian Prudential Regulation Authority to impose time limits on interest-only loans in 2018 resulted in thousands of mum and dad property investors to sell their rental properties because they could not afford principal and interest loans after being forced to switch from interest-only repayments.”
Mr Young warns that without action, rental prices will continue to surge upwards, “impacting on inflation as the Reserve Bank of Australia has warned and putting an upward pressure on interest rates”.
Property Club has released their own prediction for the increase of migrants in each capital city by the end of 2023/24, analysing the permanent migration figures recently released by the Australian Bureau of Statistics for the period 2000 to 2021 (which covers 3 million permanent migrants).
INFLUX OF MIGRANTS TO MAJOR CAPITAL CIITES
Sydney: 190,000
Melbourne: 172,000
Brisbane: 63,000
Adelaide: 36,000
Perth: 78,000
Hobart: 3,900
