It’s been a tough time for renters with the market tightening as borders reopen, but some suburbs are more in demand than others.
New research commissioned by Well Home Loans has identified 20 suburbs where there are only up to three available rental properties.
To qualify as ‘vacant’, a property had to have been advertised for rent for 21 days or more and the suburbs had to have more than 500 potential rentals among other things.
The result was a small list of Australian suburbs that had legitimate rental markets and where tenants were competing the hardest for available homes.
Well Home Loans CEO Scott Spencer said there were two different stories playing out, with investors in a strong position and tenants struggling to find a home.
“If you’re an investor in a suburb that contains only three vacant rental properties, tenants have to compete hard for your property, which gives you the chance to push up rents,” he said.
“Conversely, if you’re a tenant, life is really tough, because it’s difficult to find accommodation and you know rents are climbing fast.”
Spencer said in these areas investors were the ones with significant market power.
“To make matters worse, all the suburbs in this report are in areas with very low vacancy rates, so even if tenants were prepared to move one or two suburbs along, they’d still find it hard to secure accommodation,” he said.
These are the top 20 suburbs, in order of how much the average rent has risen in the past 12 months.
Spencer said tenants in these suburbs might want to consider buying, especially if rents had increased to a point where they were now more expensive than mortgage repayments.
That said, Spencer also noted some of these suburbs had high levels of disadvantage, as measured by the Australian Bureau of Statistics, which would make it hard for local residents to get onto the property ladder.
“Tweed Heads South and Tweed Heads West, for example, are located in an area in the bottom decile, which means their area is more disadvantaged than 90 per cent of areas within New South Wales,” Spencer said.
“That makes it hard for tenants to afford rising rents and to save a deposit.
“Conversely, Casuarina is located in an area in the top decile, which means their area is less disadvantaged than 90 per cent of areas within New South Wales. So they would find it easier to cope with the big jump in local rents and to get onto the property ladder.”