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Australia’s rental crisis continues into 2023 with low vacancies and high rents

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Australia’s rental crisis shows no signs of abatement in 2023, with low vacancies and high rents continuing to plague the country.

The Australian Bureau of Statistics reported that building approval rates for January 2023 were 8.4 per cent lower than last year, and detached house approvals dropped by 12 per cent.

These numbers are particularly concerning given they have fallen below pre-COVID levels, which Master Builders Australia CEO Denita Wawn attributed to the nine interest rate hikes over the past year.

“Despite the intention from governments and industry to reach a target of one million homes under the Housing Accord, today’s data highlights that more needs to be done to tackle supply barriers and to speed up the delivery of new homes and attract investment,” Ms Wawn said.

“Builders are seeing evidence of declining sales, and we anticipate this slowdown will continue over the course of 2023.”

The Australian government has responded to the crisis by creating a National Housing Supply and Affordability Council, which has formed a 2023 bill to establish a “permanent, statutory council” later this year.

Minister for Housing Julie Collins said the expert advice of the council would benefit all governments in improving housing and affordability.

The council’s goal is to outline short-, medium-, and long-term reforms to improve the affordability of rentals across Australia.

“It is critical that housing policy is informed by the very best advice, so today’s meeting is a big step forward,” Minister Collins said on Tuesday.

“The Albanese government will continue to listen to experts to ensure we are addressing Australia’s significant housing challenges with the very best policy advice.”

Additionally, the government has put forth the Housing Australia Future Fund Bill 2023: the first step in launching a $10 billion grant to support 30,000 new social and affordable housing properties in its first five years.

Minister Collins said the fund would be a significant investment in the future of housing in our country.

“It will be the single biggest investment by a federal government in social and affordable housing in more than a decade and will provide a secure pipeline of funding for social and affordable housing,” Ms Collins said.

The national average rent price now currently sits at $542 per week — the highest it has ever been, according to the Australian Housing and Research Institute.

This is further compounded by a national vacancy rate of 0.9 per cent as of September 2022 — a rate not seen since 2006, according to AHURI.