In our most recent analysis of the Australian housing market, we evaluated the trends and shifts in investor loans and ex-rentals across the nation. This study was initiated by examining 69,000 residential for-sale listings from April 14th, 2024, to May 12th, 2024 (a total of 29 days). By matching these listings with their last known rental status, we flagged them as ex-rental properties and tallied the totals by state. These figures were then annualised to estimate the number of ex-rentals per state based on the most recent trends and data.
Our findings revealed a significant number of properties exiting the rental market. Specifically, Victoria (VIC) stood out with 45,924 (rounded to 46,000) annualised ex-rentals, indicating a potential risk to its rental stock. New South Wales (NSW) and Queensland (QLD) also showed substantial numbers, with 44,880 and 33,624 annualised ex-rentals respectively.
To assess the replenishment of these rental stocks, we turned to the Australian Bureau of Statistics (ABS) Lending Indicators, which provide a time-series of loan commitments. By focusing on investor loans per state, we plotted a 12-month trend line to identify significant shifts. The data highlighted a notable downward trend in investor loans in select states, particularly in Victoria.
Given this downward trend, we used the average of the last three months of investor loans to project the annual number of new private rentals entering the market. This projection was crucial to understanding how many new rentals would be available based on mortgage lending, excluding cash-based purchases.
Our analysis revealed that Victoria is projected to see 40,880 new private rentals entering the market annually, compared to 45,924 exiting, resulting in a net loss of 5,044 rental properties. Other states, such as NSW and QLD, show a net gain of 9,008 and 8,600 rental properties respectively, indicating more stability.
When expressed as a percentage of private rental stock using 2021 Census data, Victoria’s net rental stock is projected to decrease by 1.0% currently, however this may get worse as new data comes to hand. In contrast, South Australia (SA) and Western Australia (WA) show significant increases of 6.1% and 5.2% respectively, suggesting a healthier rental market supply.
In conclusion, the national housing market faces varying degrees of risk, with Victoria being the most vulnerable due to its declining investor loan trend and significant net loss of rental properties. Policymakers and stakeholders must consider strategies to attract and retain property investors to stabilise the rental market and prevent further decline.
Website: www.mcgqs.com.au
