The rental crisis.

A dangerous economic cycle is descending on those living in rental accommodation. Rents are about to soar and there is a chance that many may simply find that rental accommodation is not available - at any price !
Over a decade ago, when house prices commenced their relentless increase to today's levels many decided that home ownership was out of their reach. Instead of saving for a deposit they lashed out, buying luxury cars or taking expensive world tour holidays. Lifestyle became more important than the security of bricks and mortar.
At the time there was a surplus of rental accommodation and this pushed rental prices down to the degree that it became a " renter's market ".
Since then the government has introduced - and retreated from - a surcharge on the sale of other than the family home - and there have been three interest rate rises. As a result, investment in all forms of new housing has slumped and we now have the situation where the pool of rental housing in Sydney is at it's lowest ebb for half a century - and that means price increases !
This will put more pressure on public housing. There is already a huge backlog of people waiting for Housing Commission accomodation and rental price increases and lack of availability will soon swell this to crisis level.
Unfortunately Housing Commission history has never lived up to it's aim. It was never intended as a " home for life " for the poor. The original concept was for subsidised housing for the lowly paid until they progressed to the point when they could either afford private rental accomodation - or bought their own homes.
There was no enforcement of that aim and over the years we had the situation of retired couples living in four bedroom homes and people who had risen through the corporate ranks living in concession housing while bringing home executive salaries.
Some effort is being expended to change that. New tenants are offered a rental contract that includes a time renew clause at which time their circumstances will be reviewed against their need and income.
Despite such progress, there is every indication that private rentals are going to move sharply upwards and Housing Commission demand will increase. This will put pressure on wages - and pressure on wages because of cost of living increases is quickly reflected in inflation - and when inflation increases so do interest rates.
It's a vicious circle and unless the state government releases more affordable land for housing and increases the stock of Housing Commission homes we are facing a financial crisis that will affect every resident of New South Wales.
The danger is clear and evident. The question is - will the government have the vision to act promptly and give relief ?