Building activity is up and so are rentals

Rentals are back on the up (everywhere except Sydney) and the ACT is showing amazing growth when it comes to key building activity (including renovations), ranking top in the Housing Industry Association’s Scorecard Report for the first time since 2014.

“The Australian Capital Territory has benefited from steady population growth and a stable labour market when compared to other jurisdictions,” HIA economist Tom Devitt says. “This has supported strong demand for new homes and renovation activity, which has been boosted by the HomeBuilder program. Activity in the first home buyer sector has also grown strongly.”

Despite languishing very close to the bottom, Tom says Western Australia has actually seen a huge surge in building activity since mid-2020. “The extent of the recovery is only just starting to emerge in official data. An improving economic outlook for WA, the federal government’s HomeBuilder program and the state government’s support package for residential building has seen owner-occupiers and investors return to the market.”

Having enjoyed an “incredible run of success”, Tom says Victoria’s top status came to an abrupt end in 2020.

“The COVID recession has seen the state slide from first place into sixth in just six months,” he says, adding that NSW has also fallen to its lowest Scorecard ranking since 2012.

Meanwhile, CPI figures from the December 2020 quarter reveal rentals across the country are starting to recover from the effects of the pandemic, according to the Real Estate Institute of Australia (REIA). 

Adrian Kelly

“Rents increased by 0.1 per cent for the quarter following two quarters of falls,” REIA President Adrian Kelly says, “with a fall of 1.3 per cent for the year, with all capital cities except Sydney showing an increase in the quarter.”

Sydney’s looking a little bleak still, seeing no change after five consecutive quarters of falls. 

“The CPI figures, together with ABS’s housing finance figures, show increased interest by investors on the back of improving rental market conditions across most capital cities even though rent freezes for existing tenants remain in place in some states and territories,” he says.

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