Why we need more property investors

Asking rents are rising almost everywhere because there are not enough vacant rental properties to meet the demand.

Property investors create rental supply, but rather than being rewarded, they are discouraged by falling prices, low rental yields and ever-increasing restrictions on landlord rights.

Why on earth would anyone invest in residential property when the rental income doesn’t cover holding costs, and falling prices may lead to an eventual capital loss?

Even though that’s already a lose-lose scenario for many investors, the rights of landlords are constantly being eroded while those of tenants are strengthened.

The result is that fewer properties are available for rent because investors switch to other assets such as commercial, shares or even crypto.

Punishing landlords is not the answer

While it may be politically expedient to blame investors for rapidly rising rents, the facts are that we are facing a national shortage of rental accommodation. We are not building enough new housing because of rising costs and material shortages, yet housing demand is escalating at the same time.

Vacancy rates

Based on current population growth figures, we need to accommodate around 150,000 new rental households this year, but right now there are less than 50,000 advertised rental vacancies in the whole of Australia.

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