The Illawarra’s rental vacancy rate was sitting at just 1 per cent over September, making it one of the tightest markets in regional NSW. Photo: Wollongong City Council.
Illawarra rental availability contracted significantly in September, coinciding with vacancy rates falling to new record lows across the country, according to PropTrack’s September findings.
In the region, the vacancy rate was sitting at just 1 per cent over September – a decline of 0.32 percentage points compared to three months ago.
PropTrack senior economist Anne Flaherty said these results indicated that the Illawarra had one of the “tightest vacancy rates in regional NSW”.
“During the pandemic we saw a strong increase in demand for both buyers and renters in the Illawarra region, and we’re seeing that still now,” she said.
“This is of course translating into high rental growth, and there has been a lot of competition among tenants to be successful in getting property in the region. The result is extremely low vacancy levels.”
PropTrack senior economist Anne Flaherty said persistently strong demand in the Illawarra was resulting in some of the tightest rental vacancy rates in regional NSW. Photo: PropTrack.
Ms Flaherty said it was unlikely the region would see relief in the foreseeable future.
“Broadly speaking, the strong levels of growth means there’s a strong possibility vacancy rates will fall even lower, not just in this particular region but across NSW,” she said.
“At the same time we’ve also seen a slowdown in the speed of new development activity. There are a few factors that have made it more challenging to develop – building costs have risen, and substantially higher interest rates have added to that.
“We’re also seeing a lot of hesitancy to buy off the plan due to the fact that people are seeing headlines about building companies collapsing. That again impacts the supply of new homes, because people are more nervous to go down that path.”
Rental shortages are already impacting the local economy. In its Solutions to the affordable housing crisis in the Illawarra Shoalhaven advocacy report, Business Illawarra indicated 93 per cent of businesses reported workforce shortages with 43 per cent identifying the lack of affordable housing as the underlying cause.
Key workers (public or private sector workers fulfilling a critical function) in the region faced income-to-rent ratios of 40 per cent compared to the national average of 30 per cent.
Business Illawarra executive director Adam Zarth said housing availability and affordability were very much still at the forefront of its advocacy program.
“These are absolutely factors that contribute to key workers in the Illawarra and Shoalhaven being unable to live near where they work,” he said.
“We’re working with government to try and get them to nail down some solutions and show their commitment to this issue … On behalf of employers, workers, builders, developers, housing providers and members of the wider community, we are calling on all governments – federal, state and local – to act on the solutions available to them to urgently increase housing supply in the Illawarra Shoalhaven.”
Minister for Illawarra and South Coast Ryan Park said the realities of the housing crisis confronting NSW were not lost on the Minns Labor Government.
“We are delivering on a comprehensive and holistic suite of measures to make housing more accessible in our state,” he said.
This included identifying sites on the South Coast and in the Northern Rivers to develop build-to-rent pilots in accordance with their election commitment, boosting long-term housing supply through the Housing and Infrastructure Plan, including construction of thousands of new homes through Landcom and delivering on rental reform, including protecting the rights of renters with a rental commissioner, portable bonds and ending no grounds evictions.
Other measures included speeding up planning processes while protecting building standards, establishing Homes NSW, which aimed to deliver more affordable and social housing and providing relief to 80 per cent of first-home buyers.
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