YPS Club Mar 24 - special Guest Peter Wargent joins us for a discussion on the Rental Market

So do you want to talk to what we're seeing or what we have seen in the rental market and why? Yeah, it's not the same everywhere but most new arrivals into Australia are renters. So somebody who's obviously an expat myself. You know, when I touched down in Australia back in the 1990s, I wasn't rushing off to an auction to buy a home obviously because when you first arrive, firstly you don't usually have the means, but also you don't really know where you want to live. So obviously immigration was basically shut off during the COVID period. And then we got this enormous snapback in migration. A lot of it was international students. We've got about 700,000 international students in the country as of today. But there was a period there obviously when most students were overseas. And plus we've got long term migration has picked up again and the market just hasn't been able to respond quickly enough. So there's a real shortage of rental properties. It's not the same everywhere. Darwin and Hobart and to some degree Canberra. Yeah, the rental market is tight but it's not ridiculous. But then you've got markets like Perth, Adelaide, parts of Brisbane and now even Sydney and Melbourne are going that way where it's a real struggle to find anything decent to rent. And I guess the it's been a very unusual four years for a number of reasons. But now a lot of construction firms are going under or going into receivership because the cost of constructing a new dwelling is about 50% higher than it was in 2019 or pre pandemic. And a lot of businesses work on fixed price contracts and they've just gone way over. Also a lot of people just aren't feeling the love for building or constructing new at the moment for due to the cost and interest rates. And so the new work in the pipeline is drying up as well. So all of this is conspiring really to accentuate a shortage of rentals which was coming about anyway because of anti landlord policies, particularly down your way in the Socialist Republic of Victoria. Yeah, there's a lot of things that have been working against the rental supply. A lot of landlords have even sold up as you mentioned. Yes, rents actually re accelerated in the early part of 2024 or pretty unusual. So we're getting a second wind especially for detached housing in Sydney. I mean you could make the case that Melbourne rents actually fell a little bit during COVID and now they're bouncing back to a sort of pre pandemic trend. But it's very tight in most parts of the country now.