Rental affordability in Sydney Close To Stress Threshold
Phil McCarroll writes an article for the online magazine Your Investment Property wherein he discusses the “critical condition” of rental affordability in Sydney. The Rental Affordability Index (RAI) says that the Greater Sydney area may force an average household to witness housing stress. The low income bracket may fare even worse.
Rental affordability close to the stress threshold
To access a rental dwelling, an average Sydney household needs to fork out 28% of their income. This is perilously close to the 30% threshold for rental stress. For the record, the rental costs have hit non-family residents of the lower income bracket the hardest. The situation is a lot better towards the far north (read: Newcastle), the western flank of the central city and the outer flank of the metropolitan region.
Sydneysiders forced to look west
Some experts believe that it is more like a “tale of two cities”. There are those Sydneysiders who can afford the rent (no matter what they are) and those who are forced to make a move to the western fringe. The problem may only compound given that we are going to see lesser development stock being worked on in coming times. Lesser number of homes will only increase the housing pressure.
Another trend likely to come up is an increase in interstate migration. In pursuit of cheaper rental dwellings, a few Sydneysiders may move towards places like South East Queensland.
You can read the original article here.
This is all quite expected. You can call it the churning of the great property cycle wheel. Sydney has seen an exponential capital growth. Some feel it has been an irrational ride. Be that as it may, we are definitely looking at a cooling-down period which will see lesser quantity of development stock flowing into the market.
Vacancy rate may come down further
As and when that starts to happen, Sydneysiders will be pressed for rental dwellings. Lower vacancy rate will become the norm and the rental affordability metre might even go above the 30% threshold for rental stress.