Experts are warning the thousands of houses under construction because of the HomeBuilder grants may not ease the squeeze on the rental market anytime soon.
Mother of two Cathy Browne is one of many who have struggled to find rental accommodation in the tight market. For five months she and her children have been living in a tent behind her parents’ house, that is too small to hold them all.
“It’s just been hard trying to find an affordable place to live,” she said.
According to Statista, over the past five years, the vacancy rate in Perth showed a staggering fall down from 5.1 per cent in 2017 to 0.9 per cent in 2021.
Last year saw a ban on landlords being able to raise rent prices and evict tenants enforced by the government due to the COVID-19 pandemic, but as these restrictions came to a close in March this year, many are now struggling to find suitable places to live.
According to REIWA deputy president Joe White, up until November 2019, WA had been in the longest property slump in history. There were 60 continual months of median house price drops and increases in the vacancy rate in rental properties.
October 2019 saw the housing market start to improve as rental vacancy rates started dropping and rents stabilised before a bit of a turnover around Christmas time.
“For one entire year, you couldn’t move anyone out of a rental property because of government legislation and it completely threw the market.”REIWA Deputy President Joe White
Then COVID hit.
Mr White said: “Since COVID, there have been all these marketing interferences that made the market go mad and vacancy rates have changed.
“For one entire year, you couldn’t move anyone out of a rental property because of government legislation and it completely threw the market.”
He added, mine workers who moved to WA in hopes of finding work during COVID-19 had filled up a considerable amount of the rental vacancies and created a high demand that was met with little supply.
The new housing supply resulting from the Australian government HomeBuilder grant had been expected to ease pressure on parts of the rental market.
Mr White added the new supply that resulted from HomeBuilder had lifted levels of building approvals from significant lows instead towards their 10 year average.
Around 20,000 new houses were expected to be built as a result of these grants. But due to strain on the building industry, these new developments were expected to be completed within the span of roughly 12 to 18 months.
Curtin University professor in accounting, economics and finance Steven Rowley said demand was likely to remain strong with little supply in the future, with any reduction in rent being good news for renters who were struggling week-to-week.
He added: “The strong price growth of the last year will also help stimulate new supply and, although the level of investor activity is low at the moment, the new activity should result in some increase in supply in the rental market.”
He also said despite help from the government via the stimulus packages, it would be a while until the housing and rental market were at a point that would meet the demand.
Professor Rowley said the housing grant created a strong demand, stimulating those that may not otherwise have built a house.
“WA first home buyers could get almost $70k in grants to build a new home and that was too good an opportunity for thousands to turn down.
“The increase in building activity creates jobs in the industry and there is also all the spending associated with building a new house, such as furnishings, appliances etc.”
First time renter Chase Procak said finding a place to rent in a short span of time had been extremely difficult.
“One of the hardest things was finding a place I could actually afford,” he said.
“It had been an okay experience after moving into the house as the landlord and property management have been rather nice but the experience of looking for a house, however, was very stressful.”