By the time Rebecca Khadka arrived at a midweek inspection for a unit to rent in Homebush, she already felt as if she had compromised too much in her desperation to find a home.
It is Khadka’s 11th rental inspection. Her expectations have shrunk from a three-bedroom apartment in Strathfield to a two-bedroom unit anywhere in the surrounding suburbs, and her budget has increased by $100 a week to $700.
Her applications keep being rejected.
“It’s really tough out there, because I don’t want to go too far, I want to live closer to the city, not further from it,” she said. “We didn’t expect the market to be this competitive, and this expensive.”
“It’s frustrating having to move from where you are comfortable … I don’t want that change in environment.”
Khadka, who works as a nurse in central Sydney, said she had seen up to 40 people at some inspections, scrambling just like she is to find a home as the rental market approaches crisis levels.
A survey conducted by the Real Estate Institute of NSW shows the vacancy rate has dropped to a “historical low” of 1.7%.
The number of renters per available property had risen by 28% year-on-year, according to the June 2022 rental report from property analysts PropTrack, and Sydney and Melbourne had the greatest increases.
The report also found that the number of new rental listings was 13.8% lower nationwide than the 10-year average. The total volume of rental listings was 18.2% lower year-on-year for June, and 27.7% lower than the 10-year average.
The consequences of this rental property shortfall is skyrocketing rent, cut-throat demand and a market that leaves those unable to compete without a home.
Maya, who asked to go by her first name only, is a single mother of four-year-old twins. She was given just two weeks’ notice to vacate her rental home in Yagoona. That was extended to four weeks after she begged her landlord, she said.
Maya said she rushed to inspect and apply for as many properties as possible, spending all day at inspections and all night on the phone with real estate agents.
“The landlords kept calling me, every day, pushing me to leave,” she told Guardian Australia. “They said they wanted the property, and when I told them how hard it had been to find somewhere, they said they didn’t care.
“They told me it was my problem, that I could end up on the street with my twins.”
She applied for more than 15 properties and was finally accepted one day before her notice to vacate took effect. Her new home is smaller but is also more expensive than her previous rental.
“Even if it wasn’t what I wanted, even if it was completely different to my expectations, I’m going to love it no matter what,” she said. “It was just so painful to find.”
Matthew Everingham, a director and auctioneer at Richard Matthews Real Estate, said that while rent increases were difficult for tenants, “the cost of ownership has significantly increased”.“To be fair though, we haven’t seen a rental market increase like this in many, many years,” he said.
“I think the lack of supply is a real catalyst for the competitive nature of the rental market. If there’s not many available, and you’ve got a large amount of prospective tenants looking, then, of course, you’re going to get that demand.”
Everingham said some rental inspections had gone from attracting four or five people, to averaging groups of “40 to 50 people”.
He said he had noticed more people moving farther west to secure cheaper rent.
“We’re seeing a real push from some – moving into the south-west, looking for more value for money and for larger properties,” he said. “And since cost of living has gone up significantly, if they could save a couple of hundred a week and move 15 minutes down the road, they’re going to take it up.”
Prof Nicole Gurran, an urban planner and policy analyst at the University of Sydney, said a reduction in rates of homeownership was a major driver behind increased competition for rental properties.
“We’ve got a squeezing out of people who would have previously been moving into homeownership, and are stuck in the rental market, as well as those who don’t have the income support, and don’t have the budgets to afford rent,” Gurran said.
“We’ve not provided sufficient subsidies for people to be able to afford decent housing in the private rental sector. So there’s been a chronic shortage of low-cost, rental housing in the right location.”
“You now have moderate and low income families competing in the same market as those on solid incomes, and it’s squeezing them.”
Gurran said that while increasing the amount of social housing provided by the government would alleviate some supply issues, she said expanding the commonwealth rent assistance program would be “the quickest short-term fix”.
