Victoria is on the cusp of an ‘investor exodus’, with the state projected to lose 5,000 rental properties in the next 12 months.
According to MCG Quantity Surveyors, 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 5044 rental properties.
Other states, such as NSW and Queensland, show a net gain of 9008 and 8600 rental properties respectively, indicating more stability ahead.
Managing Director of MCG Quantity Surveyors, Mike Mortlock, said the number of new investor loans has dropped dramatically, highlighting a potential shortage in rental stock and increased pressure on the market.
“Victoria’s rental market is in a precarious position,” Mr Mortlock said.
“Over the last three months, investor loans in Victoria totalled 10,220, resulting in an annualised figure of 40,880.
“During the same period, annualised ex-rentals were calculated at 45,924.
“This means we’re looking at a net loss of 5044 rental properties, a 1 per cent decrease in the state’s private rental stock.”
Mr Mortlock said some of the major suburbs investors were fleeing included Werribee, Point Cook, Derrimut, Werribee South, Truganina, Tarneit and Hoppers Crossing.
He said the issue was not just about existing landlords exiting the market; potential new landlords were also wary of investing in Victoria.
The trend suggests a broader reluctance among investors, exacerbated by policies and market conditions that dissuade investment in the state’s rental properties, he said.
“Landlords are increasingly cautious about entering the Victorian market,” Mr Mortlock said.
“It’s not just about those who are leaving, many potential investors are now avoiding Victoria altogether, seeking opportunities in other states with more favourable conditions.
“This reluctance to invest is further shrinking the available rental stock, making it harder for tenants to find affordable housing.”
According to Mr Mortlock, the situation was more positive across most of the other states.
NSW is tipped to record a net gain of 9008 rental properties over the next 12 months, reflecting a 1.4 per cent increase in the state’s private rental stock.
“This positive trend suggests that NSW is effectively maintaining its rental market stability despite fluctuations in investor activity, ensuring a balanced level of private rental properties for tenants albeit in a tight market for renters,” Mr Mortlock said.
QLD will liked record an estimated net gain of 8600 rental properties or a 2.1 per cent increase in the state’s private rental stock over the next 12 months
South Australia will see an increase of 5912 rental properties (6.1 per cent) in the coming year.
Western Australia will experience a net gain of 7,612 rental properties reflecting an estimated 5.2 per cent annual increase.
While, the Australian Capital Territory (ACT) is experiencing a relatively stable rental market.
However, Tasmania, is facing a challenging situation in its rental market, staring at a net loss of 64 rental properties reflecting an estimated 0.2 per cent decrease in the state’s private rental stock over the next 12 months.
While the Northern Territory is also facing trouble ahead with a net loss of 272 rental properties reflecting an estimated 1.9 per cent decrease
Mr Mortlock said to address this crisis, it’s crucial to avoid the blame game and focus on constructive solutions.
He said demonising landlords leads to a worsening situation for renters, who are already feeling the pinch of reduced rental availability and higher prices.
“We need to resist the temptation to point fingers at landlords,” he said.
“Blaming them as the bad guys will only exacerbate the problem, making things even worse for long-suffering renters.
“Instead, we should work on creating a more supportive environment for property investors, which in turn will help stabilise and grow the rental market.”
