Remind me, was there? I can't recall whether there was a huge demand for rental housing or not. I don't think so, but maybe it was because I wasn't renting?
If so, what was it about Covid that created this problem that we now have?
Covid resulted in an increase in working from home, so increase in demand for rooms at home. Probably also increased the number of people staying in the country who might have wanted to holiday OS, so more housing moved to short term rental.
Maybe slowed down construction of new dwellings too.
Select to expand quoteFormulaNova said..
If so, what was it about Covid that created this problem that we now have?
Think of it like this FN :
COVID (or, more correctly - political events associated with reactions to covid) created the great toilet paper panic that resulted in a shortage of toilet paper, despite the fact there was no change in usage, no change in supply and no reason whatsoever for a shortage.
Yet the shelves were bare and people were paying 10 times the cost for somethig they didn't need anymore of, but just wanted because it costed 10 times more.
For whatever random reason we have now simply moved on from toilet paper to housing.
Although we did probably go via bitcoin on the way.
Select to expand quoteFormulaNova said..
If so, what was it about Covid that created this problem that we now have?
Yes, I found the same thing very weird. There was no housing crisis before COVID that I remember.
Best explanation I heard was prior to 2020 there were 2.5 or something people per household and COVID changed this to 2.1 people per household, creating the housing crisis. IDK
Down my way there wasn't a housing crisis before Airbnb
Edit, just did a quick search
Rentals 189
Airbnb 583
Select to expand quoteMr Milk said..
Covid resulted in an increase in working from home, so increase in demand for rooms at home. Probably also increased the number of people staying in the country who might have wanted to holiday OS, so more housing moved to short term rental.
Maybe slowed down construction of new dwellings too.
Do you think this increase in demand happened when the Covid lockdowns were happening? I had to work from home as well, but it really didn't change the number of rooms I needed.
I can understand the number of people returning to Aus probably bumped this back up, but that would have normalised by now.
I guess it is lack of building and the extra from immigration. I am just surprised as I never ever would have expected this to happen. I remember when rentals were relatively easy to get you just had to choose the quality of place you would apply for.
I never expected rentals to be so in demand that landlords could ask for rental increases and never really have to defend them.
Is this ever going to go away? Are we ever going to return to a time where housing is not in crisis?
Select to expand quoteelmo said..
Down my way there wasn't a housing crisis before Airbnb
Edit, just did a quick search
Rentals 189
Airbnb 583
Similar stats in the east. If it's not the cause of the problem it's a major contributor
The Federal Government Department of Housing gives a thorough historical and predicted trend of housing demand and the impact of immigration on the sector.
Select to expand quoteelmo said..
Down my way there wasn't a housing crisis before Airbnb
Edit, just did a quick search
Rentals 189
Airbnb 583
I was talking to an AirBnB person down your way and she said that she got sick of dodgy renters and now prefers to keep a closer eye on the place through short term rentals.
My experience with a couple of properties in the welfare belt was almost all bad. Renters knew their rights and would just stop paying rent, it took weeks/months to get them out legally and then thousands to repair the damage. One renter just broke back into the place when I finally go her out, when the property manager showed up, the renter jumped out of a wardrobe brandishing a kitchen knife.
Negative gearing was not much help to me. As I mentioned elswhere, I ended up renting to a down-and-out relative who at least didn't do any damage, so I kept the rent low. Then the tax office hit me up for the rent I should have been charging. And when I sold they hit me up for capital gains tax. I'm very happy to not have the stress of being a landlord.
100k empty homes currently in Melbourne. Housing crisis is fake news. Light the torches
That's interesting. I was only after the capital gains on those investment properties, they went up about 4.5 times in value over the years I had them. I wonder if I would have been better off leaving them empty.
The place next door to me has been empty for over 25 years. It seems to be left as a sort of shrine to the partner of the current owner.
[edit] Its a pretty ordinary sort of home and seems to have gone from $150,000 to $1.1 million over that period.
Select to expand quoteremery said..
That's interesting. I was only after the capital gains on those investment properties, they went up about 4.5 times in value over the years I had them. I wonder if I would have been better off leaving them empty.
The place next door to me has been empty for over 25 years. It seems to be left as a sort of shrine to the partner of the current owner.
[edit] Its a pretty ordinary sort of home and seems to have gone from $150,000 to $1.1 million over that period.
If you leave the house empty, you end up in a similar boat in that the tax office won't let you claim any costs such as interest, rates, all that lovely stuff. If you can eat those costs, then there is no problem doing it.
If you could predict the future and can suffer the losses, I guess you might be better off leaving it empty. But there must be some sweet spot where you rent it out at a reasonable rate and still avoid damage from tenants. That's probably the holy grail though and easier said than done.
I had the same tenants for 10 years. They were good, and if it weren't for the realestate agent trying to give away my money, it would have worked out well. The agent seemed to defer to going super easy on the tenants, even though the tenants had come to an agreement with me. I think these days some agents find it easier to beat up the owner than beatup the tenant. Unfortunately you only find this out at the end, and the managing agent you start with is unlikely to be the same agent at the end.
I would argue that without capital gains discounts that there would be less landlords and lower costs to housing.
Select to expand quoteFormulaNova said..
I would argue that without capital gains discounts that there would be less landlords and lower costs to housing.
I know with apartments in Melbourne, capital gains have been flat for at leat 5 years. Rents are at roughly 4%. With all the hassles of maintenance, agent fees, land taxes, body corporate and restrictions on tennancy. I'm not convinced they stack up as a great investment ATM.
I always thought there's a natural balance in property: roughly 33% renting, outright owners and mortgages.
Something like 667 000 came into Australia last year.
Where are all the extra houses being built?
Everyone would have to be a tradie to keep up lol so if these numbers continue you ain't seen nothing yet.
Select to expand quotePcdefender said..
Something like 667 000 came into Australia last year.
Where are all the extra houses being built?
Everyone would have to be a tradie to keep up lol so if these numbers continue you ain't seen nothing yet.
219,000 migrants left last year. Add to that all the people that died due to covid vaccines and don't need a home. We should be overwhelmed with available properties right?
So you take 219 000 off 667 000 and the figure is still 448 000.
Granted there was a huge increase in deaths caused by whatever you believe the figure is still a non sustainable number unless every Tom Dick and Harry starts learning trade skills.
Select to expand quotePcdefender said..
So you take 219 000 off 667 000 and the figure is still 448 000.
Granted there was a huge increase in deaths caused by whatever you believe the figure is still a non sustainable number unless every Tom Dick and Harry starts learning trade skills.
I have to agree with you. It's just a way to keep the GDP growing so that it doesn't look like the country is suffering.
A per-capita recession is bad for the individual, but looks okay if the country itself is not in recession.
Even the 'promised new building' is not what you would think. The government is not building much at all. They are just opening up the planning rules to make it easier for developers to build more, typically in already developed areas but with higher density. To my mind that is just shifting the burden onto people that like living in nice suburbs and not a ghetto.
Governments have stepped away from social housing over the last few decades and outsourced it to the private sector. Now, those same private sector landlords are choosing higher rents and better tenants as there is so much demand.
It's a bit of a problem I think. Its a shame no one is accountable for it.
Select to expand quoteFormulaNova said..
It's a bit of a problem I think. Its a shame no one is accountable for it.
All they have to do is reduce the number massively - problem solved but they will not as its part of their solution.
I notice what seems like more houses being knocked down and new houses under construction over the last few years
Those people are all renting whilst their homes are being built.
Further pressure on the rental market
If you own a nice 5 or 6 bedroom house and rent out 5 of the bedrooms for 200 dollars a week that is 52 K per year
At 300 a week - over 75K a year.
Rent all the rooms out and live with your parents or grandparents and close to 100 K a year can be earned.
I just looked up the numbers and they have increased again.
Overseas migration 2022-23 - net annual gain of 518,000 people Migrant arrivals increased 73% to 737,000 from 427,000 arrivals a year ago
Largest group of migrant arrivals was temporary visa holders with 554,000 people Migrant departures decreased 2% to 219,000 from 223,000 departures a year ago.
Overseas Migration, 2022-23 financial year | Australian Bureau of Statistics (abs.gov.au)
More than one and a half times the population of Canberra migrated to Australia last year.
Canberra has a population of 466 000.
This is a recipe for disaster - no?
What?
518 000 net intake is a new Melbourne or Sydney every 10 years.
Who the fark is going to build all these new mega cities?
Select to expand quotePcdefender said..
All they have to do is reduce the number massively - problem solved but they will not as its part of their solution.
This is where you are skipping the obvious logic and then going for the extreme view.
There is no 'solution'. It is just a government that finds it easy to import more people so that the economy keeps growing. If it keeps growing its easier to manage and people feel better. If people feel better they keep spending. If they keep spending, the economy doesn't grind to a halt.
The last few governments have done the same, so its nothing new.
I keep telling people this, but I think most people don't believe me. The IT industry has been hit hard by this crap over the last decade. Non-existent jobs seem to somehow turn into 'we have an extreme shortage of IT people' and we keep importing more, because IT is easy to get people for from overseas. Once here they then find it difficult to get a decent job after the first one and a few go home after they realise the 'shortage' is not real, or they see the cost of owning a house here.
Over time, immigration should be good for Australia, as long as it ramps up slowly. Too quickly and we have more people for fewer jobs. If done right, the job market grows at the same time.
I saw something on Quora the other day about someone from Europe that moved to Perth in 2014 and is now considering going back to Europe as the cost of living and getting work is so challenging that he thinks its better back there. He was saying that the whole temporary visa thing is a scam where people just compete to work in any job they can for as many hours as they can get away with.
Select to expand quotePcdefender said..
What?
518 000 net intake is a new Melbourne or Sydney every 10 years.
Who the fark is going to build all these new mega cities?
See that's the cleverness of the idea. No one builds new cities and just jams more people into the same space. No one actually has to do much hard work. Cities become more crowded and high rise becomes more common. Bad luck if you live close to a train station as you will be steadily pushed out so that more apartments are built.
Me, I personally would love it if someone turned around and said 'we are building a new large city in NSW, Victoria, or South Australia, and this is where the bulk of the migrants are going to go'. But it will never happen, so the easy solution is just push more in until it is full. Maybe we need Elon Musk to build a new mega city somewhere in Aus?
Sadly I think a lot of people will be okay with lots more immigrants until it affects them. If you have a few investment properties and a good job, what could go wrong?
