BIS Shrapnel, leading industry analyst and economic forecaster is anticipating rental growth around Australia will surge in 2010. Over the three years to 2012, the average yearly rental growth will be 5.8% nationally. This will result in rental households passing an extra $1.9 billion to landlords each year.
A chronic housing shortage and hints of more interest rate rises have been blamed for the expected pressure on weekly rents with rents in some parts of the country forecast to leap by more than 7% in the next 12 months.
Melbourne in particular will see a strong surge in rental growth fuelled by historically low vacancy rates and rental demand can expect an increase in excess of 5.6% from 2010 to 2012.
Jason Anderson, BIS Shrapnel's senior economist said rental growth of above 5% annually was considered high: "In years previously, it was more like one or two percentage points per annum."
He concluded that with net migration at a record high in the past financial year, demand remained strong.
Severe restrictions on lending by banks to residential developers was part of the problem with Angus Raine, chief executive of real estate agency Raine & Horne saying,
"The funding is not there for developers."
The Housing Industry Association's acting chief executive, Graham Wolfe, said it had been concerned about rent prices for some time. "Releasing enough land is part of the equation, but the housing built needs to be affordable."