MILDURA’S spiraling rents have been forecast to get even worse as supply struggles to keep pace with demand.
The president of independent investment group Property Club, Kevin Young, says a massive influx of migrants during a time of famine in rental properties over the coming year will force rent inflation to “explode”, with many of the new arrivals already looking to the regions for living options.
Rental rates in the Mildura local government area rose by almost 10 per cent in the past 12 months and Mr Young anticipates that climb to continue with the influx on migrants having a “disastrous” impact on the rental crisis in major capital cities.
He said this would force some to move to regional areas as an alternative and create a worsening shortfall in rental availability.
Mildura’s population has been forecast to grow from just over 57,000 people in 2022 to 62,600 by 2036.
Vacancy rates for rental properties in the Mildura LGA decreased from 1.1 per cent to 0.5 per cent, with anything below 2 per cent considered to be an extremely tight market.
“A major population bomb is about to hit our cities in Australia, where rental properties are already in very short supply,” Mr Young said.
“Rental prices will only surge further, impacting on inflation as the RBA has warned and putting an upward pressure on interest rates.”
Mr Young said the harsh reality was that regions could nnot provide enough rental accommodation for the people who currently lived in them, regardless of those who were now expected to arrive in each of them due to the surge in overseas migration.
“Vacancy rates are already at near-record lows in many parts of Australia and, as a result, rents have been increasing,” he said.
“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.”
The Property Club is calling on the Federal Government to reinstate depreciation benefits associated with owning second-hand properties, 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,” he said.
“We are also calling on the Federal Government to reinstate interest-only lending without time limits for property investors.
“And 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 selling their rental properties because they could not afford principal and interest loans after being forced to switch from interest-only repayments.
“The Property Club believes these two simple policy measures are urgently needed to prevent the rental crisis from becoming a major disaster following the influx of these thousands of new migrants into our cities.”
