The latest rental bond data is a good proxy, with the number of bonds dropping by 3.6% in the 2024 calendar year, or 4.1% from the June 2023 peak. A total of 649,978 down from 677,835, or a 27,857 total reduction.
The suprising thing is that rental growth has also slowed, indicating demand has dropped. I suspect this comes down to two key factors:
🏠some renters buying from investors, and 👨👩👧👦 renters being capped out, thus increasing the proportion of shared rentals/average household size and reducing overall quantum of dwelling demand.
I’ll refer you to points I’ve made previously about this short term gain for FHBs becoming long term pain for renters against a backdrop of falling completions and a still fast-growing population.
The expected reduction in interest rates during the course of the year will likely slow the investor exodus and start to raise pressure across the board.
And Build to Rent outside the CHP sector won’t improve the affordability equation.
This doesn‘t end well for Victorian renters. First Home Buyers – get in whilst you still can.