Budget hangs renters out to dry

A woman looking out a window.

While the government will be introducing or extending programs which aim to help first home buyers, little attention has been paid to the nation’s renters, a cohort which makes up nearly a third of all Australians.

Data from property research firm CoreLogic revealed that national rents rose 3.2 percent over the quarter to March 31, adding to the already significant number of hurdles renters face when saving to buy a home.

Meanwhile, housing prices have continued to soar, increasing by 10.2 percent across Australia after bottoming out in September last year (CoreLogic).

Rather than attempting to cool down the property market, which is growing at a record pace, the government’s focus so far has been on increasing the accessibility of mortgages.

Last week, it announced the Family Home Guarantee, an initiative which will let 10,000 eligible single parents purchase a home with a deposit of as little as 2 percent.

It will also make an additional 10,000 places available under the First Home Loan Deposit Scheme, starting from 1 July 2021.

First time buyers will also be able to access a maximum of $50,000 in voluntary super contributions, up from $30,000, to fund their property purchase under the First Home Super Saver Scheme.

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While these measures are welcome, advocacy groups have criticised the government for neglecting low and middle income Australians by failing to invest in social and affordable housing.

Kate Colvin, spokesperson for the Everybody’s Home campaign which represents renters and the homeless, said the Budget measures neglect the areas where need is greatest.

“Escalating housing prices are pushing more and more people into homelessness, including women and children escaping family violence, young people who can’t stay at home and older people on low incomes, especially women,” she said.

Rents in Sydney and Melbourne remain subdued

While national rents have been pushing upwards, CoreLogic research director Tim Lawless points out that conditions are remarkably different across markets, providing a sliver of hope for some Australians.

“At one end of the spectrum we have Perth and Darwin where annual rental growth is well into double digits and accelerating. At the other end is Melbourne and Sydney where rents are down over the year,” he said.

For Australia’s two largest cities, international border closures have dealt a significant blow to the rental market, which was already in the doldrums thanks to an oversupply of apartments.

The dropoff in international students and visitors has led to an 8.2 percent drop in Melbourne unit rents over the year, and a 4.9 percent drop in Sydney unit rents.

This could ease some of the pressure on renters’ finances, if not open up opportunities for those hoping to buy a property of their own.

For more information on property and lending trends, head over to our home loan statistics page. And if you’re in the market for a home loan, visit our home loan comparison page, or browse the selection below.

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