Housing affordability has been talked up by both major parties as a key fixture of the election campaign. It is, however, an issue that will not simply go away as quickly as the election battle.
For an increasing number of Australians rising interest rates and inflation on the back of rising fuel and grocery belts, are tightening many belts. Those with mortgages are being consumed by mortgage stress, and with low vacancy rates fuelling big spikes in rents, tenants are not being left behind either.
A report by the National Centre for Social and Economic Modelling and the Housing Industry Association (HIA) predicts that the number of households spending more than a third of income on rent is set to rise over the next three years. There are expected to be another 230,000 households facing rental stress over the next three years, and that takes the total in Australia to three quarters of a million.
Chris Lamont of the HIA states that almost one in two tenants throughout both metropolitan Australia and regional Australia, are really struggling just to put a roof over their head.
Whilst traditionally rental stress has been more an issue in the major capital cities, we have to now take into consideration that a lot of regional centres, as a consequence of the mining boom rents have also been rising at very fast rates. In some areas, wages have kept up with those increases, in most, they haven't.
Regardless of which party occupies the powerful side of parliament following the federal election, the rental crisis is really going to rear its ugly head at the beginning of 2008.
The majority of tenants are looking for new properties at the beginning of the year, and given that the market is already very inflated and strained in addition to a vacancy rate at its lowest on record at 1.7%, the stress is only going to get worse.
Some form of targeted assistance, perhaps in the form of a rental rebate scheme would certainly assist many and deflate the issue, as would further assistance to first home buyers.
Unfortunately, it’s definitely time to batten down the hatches and tighten those purse strings as such relief will unlikely be forthcoming quickly enough. Simon Turner