HOUSE prices might be sluggish, but all signs are pointing to a booming rental market this year, with long queues at inspection times and tight vacancy rates.
But high rentals and shortage of properties means landlords are able to pick and choose tenants who tick every box, leaving many single parents and self-employed people struggling to find a home. Tim McKibbin, CEO of the Real Estate Institute of NSW said the residential rental market was suffering under a heavy demand which is far outweighing supply. Figures from Australian Property Monitors showed the median rent for houses in Sydney has now reached $500 a week and $460 a week for units. "It is a landlords' market," Mr McKibbin said. "When you've got 30 people lining up for the one property, you're essentially going to have 29 people missing out. "At the end of the day, what the landlord is looking for is a person who goes into their property and won't wreck it. They're looking for capital growth and they're looking for someone to pay the rent on time," he said. He said the residential rental market needs to be looked at like any other market which is driven by supply and demand. "Our supply of properties coming on to the market just simply doesn't meet the demand. It's that simple," Mr McKibbin said, adding that an "addiction" to property taxes at all levels of government coupled with obstacles for planning approvals lead to a slowdown in much needed construction. "With supply not meeting demand I'm very certain that you're going to see rents remaining quite high." Mr McKibbin said that investors, an increasing amount of whom are mum and dad investors planning for their retirement and not multimillionaire property barons, are just treating their investments as a business transaction. "People who invest in residential property aren't investing because there's a housing shortage, they're investors. The only reason people invest is because they're looking to make a gain out of it," he said. Inner Sydney vacancy rates fell below 1 per cent by mid last year, a rate the REINSW described as "alarming". According to Mr McKibben the situation could worsen as many potential first-time buyers are now staying on the rental treadmill longer thanks to recent changes in stamp duty requirements: "With first-home buyers now having to fund their stamp duty, whereas up to the December 31 they didn't have to, the consequence is you're going to see more people trying to acquire rental properties."
