The Rental Crisis extends its effects on Families
No doubt, the rental crisis has extended its effects on families and newcomers in Australia.
Mohamed, a husband and father of three moved to Melbourne, Australia in August 2019.
“We rented a newly built house in Donvale based on our Australian extended family and friends suggesting that it is a safe and family friendly suburb in inner east Melbourne,” he said.
“Due to the size of the house and new condition our weekly rent started off at $850 per week, it was definitely beyond the average weekly rent in Donvale, but I justified it due to the new age and superb location of the house,” he said.
Shortly after moving into the house the landlord reached out with the request of wanting to increase the weekly rent from $850 to $950. This was only 6 months into the lease contract and just right before the pandemic declaration.
“I was told by the agent and my lawyer that there is a surge in the rental market, especially in suburbs that are ‘highly ranked’ but I was still shocked at the landlord’s request. It was too sudden for us,” Mohamed said.
According to Domain’s 2017 and 2019 rental report, the rental surge crisis has been brewing in the market way before the pandemic.
“In my analyses, the average rent prices were surging regardless of the pandemic crisis. These surges we’re currently witnessing due to ‘inflation’ have been happening several times in cycles in the rental market since 2016 so I’m not surprised to see this current climate in our market,” Edward Saied, an economist, engineer and real estate company owner said.
According to the NHFIC home insight report for 2020-22, the pandemic and governmental rent freeze rule caused a further spike in the current inflation price increase.
“Because I am a newcomer in Australia with a business and investment visa, when the pandemic hit and the rent price increased, I was not eligible to reach for any government help during those difficult times,” Mohamed said.
“Thankfully my lawyer facilitated a way in court for the government to help me pay the newly increased rent price by making me pay almost just the half during lockdown, but after the government lets go of the rent freeze I would be on my own,” he said.
According to NHFIC’s report study, the government rent freeze encouraged landlords to put their properties for high-short-stay market, which adds onto an already difficult situation.
“Now with the immigration door being open, investors starting to come in along with students, the situation has been difficult, it’s like a war in the market and no one’s really winning,” Edward Saied said.
According to Saied’s company data, the increase and delay of housing supplies shipment has made it difficult for housing projects to finish on time and be affordable on the market to sell.
“When I was finally done with my lease contract and back to Australia after spending the last lockdown overseas, I was shocked to see that even if I want to move houses for a better averaged priced one, it was simply impossible,”
“The ‘overpriced’ house that I wanted to leave became the norm in my suburb, even if the house is not as brand new or big, the surge was very visible this time,” Mohamed said.
Today, Mohamed and his family continue to live in Donvale in a new and slightly bigger house with a weekly rent price of $980. According to ‘Real Estate’ 2022 data report, the average rent price per week for a four bedroom house is $615 per week.
“Believe it or not but this was the best rent price I could find in the area for a house that is in similar condition as my first house,” he said.
On September 26, the agency who’s renamed ‘Housing Australia’ will be taking the national lead in increasing supply as well as improving housing affordability under the federal government. They have stated that a new boost in immigration and investment will help improve the numbers in NSW, QLD and VIC by 2024.
