Australia's rental market has experienced significantly increased pressure over the past two years - asking prices have soared while vacancy rates hit record lows.

The HIA is calling on the government to prioritise building new social housing supply, attributing the rental crisis to severe shortages in the supply of all forms of housing. 

HIA Chief Executive Industry Policy Kristin Brookfield said while new home building has increased, there still isn't enough private rental housing to meet demand.

"The outcome of a shortage in supply is an ever growing increase in demand for both social and affordable rental housing across Australia," Ms Brookfield said.

"HIA has always maintained that sufficient housing needs to be available in each segment of the housing continuum. At a time when both owner occupied housing and market rate rental housing are under pressure, ensuring an adequate supply of affordable rental housing has never been more important."

Ms Brookfield called on the National Housing Finance and Investment Corporation (NHFIC) to continue growing its program to facilitate building more community rental housing.

"Next year the National Housing and Homelessness Agreement will be reviewed. This agreement needs to do more and be used to identify ways that all governments, federal and state, can increase their commitment to new social housing supply, year on year," she said. 

“It is also important to ensure that private investors are supported to maintain their homes in the private rental market."

Ms Brookfield said rental affordability is linked to house prices, and that at a time when not everyone can afford to buy a house due to cost of living pressures, affordable rental housing is imperative.

"This election provides an important opportunity to deliver secure housing for all," Ms Brookfield said.

"This will support Australia’s economic recovery and our future economic growth."

City living boom? Brisbane vacancy rates plummet

Rental vacancy rates in Queensland have hit record lows in the March quarter in more than half of the state's local government areas (LGAs), with some regions hitting 0.1%.

All Queensland regions (except Redland's Bay Islands) have vacancy rates at 1.5% or less - well within what the Real Estate Institute of Queensland (REIQ) labels as tight (0 to 2.5%).

Brisbane's rental market experienced the biggest drops on record as its vacancy rate plummeted to 0.7%.

Specifically, Inner Brisbane's vacancy rate dropped to 1.5%; Middle Brisbane fell to 0.9%, and Outer Brisbane fell to 0.6%.

REIQ CEO Antonia Mercorella said the rental squeeze in Brisbane could be a sign that people are returning to city living.

"While we continue to see regional markets gradually tightening, Brisbane’s vacancy rates have taken a dramatic dive this quarter, especially when looking at the 0 to 5km Inner Brisbane ring," Ms Mercorella said.

"This drop could reflect the return of international students as well as hospitality and entertainment workers to the inner city, or simply prospective renters focusing their search in areas where the vacancy rate is healthier and they have more options and therefore better prospects."

She said other factors adding to the dwindling rental stock is the recent flooding, which displaced people from their homes, and increased investors selling and more owner occupier buyers removing many properties from the rental market.

"With the second stage of rental reforms looming, the last thing we need right now in the midst of a rental crisis, is legislative reform which undermines investor confidence,” she said. 

“With record low vacancy rates, and 36% of our population renting their homes, we can’t afford to reduce the appeal of investing in Queensland.”


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