Australia will face a huge shortage of apartments once immigration lifts, Dare Properties founder Danny Avidan told a property conference on the Gold Coast.
Speaking on the first day of The Urban Developer’s Urbanity 2022, Avidan said the sector “was building only half of what we need to have and that is right across Australia”.
Avidan was part of a panel on Thursday, August 4, exploring private developers’ perspectives on the industry.
Also adding their expertise to the panel were Beulah International co-founder and executive director Adelene Teh; Sammut Group chief executive Allen Sammut; and Experiences By Coopers director Martin Cooper.
Avidan said that demand exceeding supply would drive up prices, and consequently affect people’s ability to afford other goods and services.
“We think that there will be a huge shortage of apartments,” Avidan said.
“Rents are already going up and prices will go up a year or so from now.”
Rents have increased significantly across the country with Melbourne the cheapest place to rent with an average price of $480 a week.
Domain’s figures for the June quarter this year showed that affordability, which had previously been a concern for houses being rented, was now being faced in the rental apartment market segment.
It was the fifth consecutive quarter of growth for rental house prices and the fourth consecutive quarter of growth for rental prices for apartments.
It is the strongest growth streak for rent prices in the past 14 years.
High purchasing prices for housing has locked some people into the rental market for longer, driving up demand.
Rents have also gone up as the increases in mortgage rate repayments mean home loan costs are being passed to tenants.
Domain chief of research and economics Nicola Powell has said there were many factors affecting record rent increases.
“The numbers that we’re seeing are [also] a result of a combination of … weaker investment activity throughout 2019-20, fewer building completions, greater household formation, investors cashing in on the recent price boom and rental demand being boosted by the return of international students and overseas migration,” Powell said.
Quantify Strategic Insights’ director Angie Zigomanis, who also presented at Urbanity 2022 in a session focussed on the changing population profiles of cities and regions, said that the composition of households in certain areas had changed during and after Covid lockdowns, also adding to the demand for rental units and houses.
“You had many households with two or three people in them and then during Covid, we saw many of them separating out into single-person households,” he told the audience.
