The Australian residential property market is the section of the Australian property market that provides rental properties by landlords to tenants. In Australia 31% of households rent their residences. [1] The vast majority rent from private landlords, and a small minority rent from public housing authorities. Over the last three decades the proportion of Australians in public housing has halved, whilst the amount renting privately has grown. [1] [2] The average weekly price for a rental in Australia is $570 AUD. [3] Sydney has the most expensive capital city rents. [4] Rental rates have increased faster than inflation in recent years. [3] [5]
In recent years, the cost of Australian rentals has become a prominent political issue; dubbed the 'rental crisis'. Demand remains high while supply is low. [4] Some have advocated supply-side reforms to address the crisis, such as reforms to construction approvals, [6] others for price controls, [7] and others for demand-side reforms like immigration restrictions. The actions of Australia's major parties on the issue have been widely criticised as inadequate, [8] though praised by some. [9]
Around one third of Australia's 9.8 million households pay rent for their residences. The other two thirds are owner-occupiers, half of whom have a mortgage. [1] [2] [Note 1] Of the households that rent, ~83% rent from private landlords, while less than 10% rent from public housing authorities. [2] [Note 2] The proportion of households from a public housing authority has approximately halved since 1995, while the proportion renting from a private landlord has increased by over ~40%. [2]
Immigrants overwhelmingly settle in Sydney and Melbourne, exacerbating the shortage of supply in those cities. [10]
The average weekly price for a rental in Australia is $570 per week. Units are typically cheaper, at a national median of $540 vis-a-vis houses at $582. [3] Rental prices grew nationally by 10.1% between 2022 and 2023; substantially higher than the annualised CPI rate of 7% for the period. [3] [5] Vacancy rates are historically quite low, at around 1%; a rate some argue is indicative of upward price pressure. [11]
Median rents across Australian cities as of Q1 2023 is as follows: [3]
| Region | Median Rent (per week) | Gross yields [Note 3] | Vacancy rates [Note 4] |
|---|---|---|---|
| Sydney | $699 | 3.22% | 1.2% |
| Melbourne | $526 | 3.4% | 0.7% |
| Brisbane | $599 | 4.34% | 1.1% |
| Adelaide | $531 | 4.09% | 0.3% |
| Perth | $572 | 4.85% | 0.6% |
| Hobart | $563 | 4.39% | 1.7% |
| Darwin | $588 | 6.39% | 1.8% |
| Canberra | $674 | 4.19% | 2.0% |
| National | $570 | 3.9% | 1.2% |
Rental availability and affordability has become a prominent issue in Australian Politics recently, with the topic being the subject of substantial media coverage and political debate. [12] [13] [14] [15] Media reports have included coverage of low income households being unable to find suitable accommodation and forced into homelessness. [16] [17] Some suburbs in Australia saw rent increase between 30-40% from 2020 to 2022; [17] with Bellingen on the NSW coast experiencing an annual rent increase of 48%. [18] In September 2023, the national vacancy rate declined to 1.1%. [19]
Reasons provided for the crisis vary, with some blaming failures in residential construction processes at the council level, [20] a lack of public housing construction, [21] vacant residences, [22] increases in short-stay accommodation [23] or demand factors like immigration. [12] Reductions in average household size during the Covid-19 pandemic have also been pointed for driving a demand squeeze. The pandemic has prompted a desire for more space and to live with fewer people. [24]
Solutions proposed to address Australia's rental crisis also vary. Some economists have proposed reforms to residential construction approval process, [6] while others (most notably the Australian Greens) have proposed an introduction of rent controls. [7] Major parties proposals at a national level to address the issue have included a scheme proposed by the ALP called the 'social housing fund', [25] whilst The Coalition has promoted assistance schemes to increase rates of home-ownership. The responses of Australia's major parties have been criticised as inadequate. [26] [8] [27]
In the United States, rent control refers to laws or ordinances that set price controls on the rent of residential housing to function as a price ceiling. More loosely, "rent control" describes several types of price control:
A real-estate bubble or property bubble is a type of economic bubble that occurs periodically in local or global real estate markets, and it typically follows a land boom. A land boom is a rapid increase in the market price of real property such as housing until they reach unsustainable levels and then declines. This period, during the run-up to the crash, is also known as froth. The questions of whether real estate bubbles can be identified and prevented, and whether they have broader macroeconomic significance, are answered differently by schools of economic thought, as detailed below.
Jeonse, also known as chŏnse, key money deposit or key money, is a type of lease or deposit common in the South Korean real estate market. Instead of paying monthly rent, a renter will make a lump-sum deposit on a rental space, at anywhere from 50% to 80% of the market value, which is then returned at the end of the lease term. The owners make profit from reinvesting the jeonse deposit, instead of receiving the monthly rent. It is also possible to combine a lower jeonse deposit with a small monthly rent; this is known as banjeonse
Affordable housing is housing which is deemed affordable to those with a household income at or below the median as rated by the national government or a local government by a recognized housing affordability index. Most of the literature on affordable housing refers to mortgages and a number of forms that exist along a continuum – from emergency homeless shelters, to transitional housing, to non-market rental, to formal and informal rental, indigenous housing, and ending with affordable home ownership.
Public housing in Australia is one part of social housing and the other is community housing. Public housing is provided by departments of state governments. Australian public housing operates within the framework of the Commonwealth-State Housing Agreement, by which funding for public and community housing is provided by both federal and state governments. According to the 2006 census, Australia's public housing stock consisted of some 304,000 dwellings out of a total housing stock of more than 7.1 million dwellings, or 4.2% of all housing stock.
Rent regulation in New York is a means of limiting the amount of rent charged on dwellings. Rent control and rent stabilization are two programs used in parts of New York state. In addition to controlling rent, the system also prescribes rights and obligations for tenants and landlords.
Home ownership in Australia is considered a key cultural icon, and part of the Australian tradition known as the Great Australian Dream of "owning a detached house on a fenced block of land." Home ownership has been seen as creating a responsible citizenry; according to a former Premier of Victoria: "The home owner feels that he has a stake in the country, and that he has something worth working for, living for, fighting for."
The Australian property market comprises the trade of land and its permanent fixtures located within Australia. The average Australian property price grew 0.5% per year from 1890 to 1990 after inflation, however rose from 1990 to 2017 at a faster rate. House prices in Australia receive considerable attention from the media and the Reserve Bank and some commentators have argued that there is an Australian property bubble.
The Australian property bubble is the economic theory that the Australian property market has become or is becoming significantly overpriced and due for a significant downturn. Since the early 2010s, various commentators, including one Treasury official, have claimed the Australian property market is in a significant bubble.
The Ellis Act is a 1985 California state law that allows landlords to evict residential tenants to "go out of the rental business" in spite of desires by local governments to compel them to continue providing rental housing.
Affordable housing in Canada refers to living spaces that are deemed financially accessible to households with a median household income. Housing affordability is generally measured based on a shelter-cost-to-income ratio (STIR) of 30% by the Canada Mortgage and Housing Corporation (CMHC), the national housing agency of Canada. It encompasses a continuum ranging from market-based options like affordable rental housing and affordable home ownership, to non-market alternatives such as government-subsidized housing. Canada ranks among the lowest of the most developed countries for housing affordability.
Rent regulation is a system of laws for the rental market of dwellings, with controversial effects on affordability of housing and tenancies. Generally, a system of rent regulation involves:
The Costa–Hawkins Rental Housing Act ("Costa–Hawkins") is a California state law enacted in 1995, placing limits on municipal rent control ordinances. Costa–Hawkins preempts the field in two major ways. First, it prohibits cities from establishing rent control over certain kinds of residential units, such as single-family dwellings, condominiums, and newly constructed apartment units. Second, it prohibits "vacancy control", also called "strict" rent control. The legislation was sponsored by Democratic Senator Jim Costa and Republican Assemblymember Phil Hawkins.
Housing in the United Kingdom represents the largest non-financial asset class in the UK; its overall net value passed the £5 trillion mark in 2014. Housing includes modern and traditional styles. About 30% of homes are owned outright by their occupants, and a further 40% are owner-occupied on a mortgage. About 18% are social housing of some kind, and the remaining 12% are privately rented.
The term housing crisis refers to acute failures in the housing market at a given place and time. Depending on the context and the speaker, the term has taken on substantially different meanings. A prominent current use, for example, refers to shortages of available housing in the United States and other countries, but it has also been used to describe financial crises related to the real estate sector.
Affordable housing is housing that is deemed affordable to those with a median household income as rated by the national government or a local government by a recognized housing affordability index. A general rule is no more than 30% of gross monthly income should be spent on housing, to be considered affordable as the challenges of promoting affordable housing varies by location.
New York City has the highest rents of any city in the United States.. For many decades, the New York metropolitan area has suffered from an increasing shortage of affordable housing, with the majority of renters in the city being rent-burdened.
The Canadian property bubble refers to a significant rise in Canadian real estate prices from 2002 to present. The Dallas Federal Reserve rated Canadian real estate as "exuberant" beginning in 2003. From 2003 to 2018, Canada saw an increase in home and property prices of up to 337% in some cities. In 2016, the OECD warned that Canada's financial stability was at risk due to elevated housing prices, investment and household debt. By 2018, home-owning costs were above 1990 levels when Canada saw its last housing bubble burst. Bloomberg Economics ranked Canada as the second largest housing bubble across the OECD in 2019 and 2021. Toronto scored the highest in the world in Swiss bank UBS' real estate bubble index in 2022, with Vancouver also scoring among the 10 riskiest cities in the world.
Negative gearing in Australia deals with the laws in the Australian income tax system relating to net loss suffered by a taxpayer on their investment property, commonly called negative gearing. Negative gearing can arise in a number of contexts; for example, with real estate investments, it arises when the net rental income is less than the mortgage loan interest payable, and with shares, when net dividend income is less than the interest payable on a margin loan.
Community housing in Australia is not-for-profit affordable housing provided by community housing organisations known as Community Housing Providers (CHPs). It is part of the social housing sector. CHPs have varying modes of operation and structure, and different types of stock. Any budget surplus in CHPs must be used to maintain existing housing, to provide better services for tenants or to help finance new properties. Although independent, the CHPs are regulated by the state, and commonly receive public funding. Most of their stock is owned by public housing authorities (SHAs) in each State, and the CHPs manage the tenancies using the rent received from tenants.
