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Mark Bouris was in the media this week reporting that there has been a 21% fall in rental property listings across Australia over the past 12 months.
“On the flip side there’s been a 28 per cent increase in people who are wanting to rent properties,” Bouris told Sky News Australia.
“So, you know if you look at those in terms of numbers, around 140,000 properties are what is needed to rent every year and we’re around 80,000 – so it’s a pretty big deal.”
Bouris told Sky News and Channel Nine’s Today Show that this is a problem, as news circulated that more than two million temporary and permanent visas have been processed since June 1, meaning a significant amount of travelers, students and skilled workers will soon be entering Australia.
“I don’t know where they’re going to stay. And that’s a big problem,” said Bouris.
“But I do know one one net effect of all that is if you increase the demand for rental properties by another 2 million people, you’re going to see rental prices increase to crazy amounts. And we’ve already seen a 19% increase in house rental prices over the last two months and a 15.7% increase in the unit prices over the last 12 months in terms of rentals, and I would expect that1 to continue to grow over the next 12 months.”
Bouris said this is a growing concern for homeowners, as rental prices “have a big impact on inflation” which in turn could play a role in future interest rate rises.
The concern comes amid reports from KPMG this week that the official cash rate will peak at 3.35% by early next year, however, in welcome news for homeowners, Mark is not forecasting such a drastic increase.
“I’m saying we’ve got two more rate rises this year and I think the official cash rate will be just above 3% sometime next year.
“I think it will, that’ll be enough to moderate us and I think we could even perhaps even see one one rate reduction at some stage later next year.
“So I don’t see it going as hard as what KPMG predicted.”
Tune in to Mark’s media appearance via the video below.