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ACT rental crisis still hurting

Canberra is still in the grip of a rental crisis despite the Federal government’s extension on the first home owners grant.

According to new SQM research the number of houses available for rent in the ACT has decreased dramatically in the past five months.

Local renter and architect, John Glennan, said, “I found it almost impossible to find a house recently, I am currently paying through the roof to live with two of my mates in a very small apartment.”

Mr Glennan is lucky he has a roof to pay for, according to SQM research, vacancy rates are at 1.3 per cent. These rates have changed little since September 2008.

Australian Property Monitor has recorded an increase of 11 per cent for the median price of rental houses and units over the past six months.

The increase of the median price of rental properties is the highest of any major city in Australia.

Last year SQM research predicted the first home owner’s scheme would increase vacancy rates. The latest report released by SQM states that rent are likely to rise despite earlier reports suggesting a massive hike .

Economists have said the first home owner’s scheme did not work in Canberra. There is a shortage of houses to buy therefore the market will remain dominated by landlords.

“When the supply of rental accommodation is low and the demand high, the price of [of houses] and rent skyrockets,” economist Kylie Dougherty said. “Bringing in more supply will help the situation and bring down prices and rent, but it may take some time.” .

The only white light for Canberra renters is the increase of land releases. The Stanhope government has dramatically increased the amount of land for sale in the past five years in order to prevent the rental crisis from escalating.

The time lag from such an investment is predicted to be three years.

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