Rents are tipped to skyrocket over the next five years due to a housing shortage across the country, an economic forecaster said.
Research firm BIS Shrapnel said it expects national building commencements to fall for a third straight year, dropping five per cent to 142,500 new homes in 2006/07 following a four per cent drop in 2005/06.
BIS Shrapnel senior project manager Jason Anderson said such a result would inflame the country’s already tight rental market, which is meeting increased demand from a growing population.
“Rental markets throughout Australia are as tight as a drum, with vacancy rates in all capital cities below 2.5 per cent as at June 2006,” he said. “With the supply of new dwellings decreasing, rental markets are set to tighten even further in 2007 and 2008.” Mr Anderson said strong population growth supported by increased overseas migration would push demand for new homes, particularly for rental property use, up to about 165,000 in 2006/07, leaving a shortfall of about 22,500 homes….more