Dubbo's rental increases come from cost of living crisis

Fiona Gibbs, a member of the REINSW-Orana Division committee and a Dubbo Property manager, said data by Housing NSW shows the slowing increases are reflective of the cost of living pressures in the economy.

While some commentators in the housing sector have been forecasting the likelihood of investors leaving the residential investment market, the opposite is reflected in bonds held at end of March quarter.

"That over the six major inland regional centres from Albury to Tamworth, the total number of bonds held at end of March quarter, rose by 2.90 per cent, an increase of 867 overall, of those - 127 are in Dubbo," she said.

"The increased supply of rental property and the slowing of rent increases is a positive outlook for tenants, suggesting the high increases of the last two years have moderated."

With affordability as the major issue Dubbo and the Orana Division is facing at the moment, there are many potential tenants who are not able to meet the affordability criteria.

The affordability criteria means the weekly rent needs to be equal to or less than approximately a third of the household income.

Dubbo Real Estate sales executive Tara Searle said this was becoming "unachievable" for many tenants, especially those on single income households.

"The positive takeaway is that regional NSW is a popular place to live with high demand for properties and will hopefully entice more investors to invest in property in the Orana Division," she said.

With some places seeing a 13 or 16 per cent increase in rent from the previous year, Ms Searle said it was a good indicator of the housing market.

"It once again displays the urgent need for more affordable housing options to be built to increase the supply, particularly of one and two bedroom units which are in short supply in Dubbo and the surrounding areas," she said.

The REI Orana Division Committee have consulted with the Dubbo Regional Council to express the urgent need for more affordable housing to be constructed.

If you're looking for a cheap rental, Orange is not the place to look, with prices sky rocketing above the rest of Western NSW.

With the highest rental figures across the region, they are still lower than what they were during the height of the pandemic.

An Orange Real Estate representative who specialises in rentals said they were finding the big prices they were getting during the pandemic are going down and they are having to adjust.

"That's been for the majority of this year, the price to rent a house is going down, which obviously doesn't help the owners when the interest rates are going up," they said.

From Realestate.com.au from July 2022 to June 2023 the median rental prices in Orange is $520 per week for houses. Unit and apartments are around $400.

"During COVID it was about $550-plus for houses," they said.

The representative said they had noticed that the market had slowed down with less people renting.

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"From all agents available, properties in Orange, there are 151 properties, during COVID we were probably sitting around 30," they said.

"There's a lot more available, tenants can obviously be a bit more picky, that's why it's probably taking a little bit longer to lease properties.

"I think people just don't want to move in winter because it's just so cold, people want to stay put."

With a need for affordable housing, the Orange Real Estate representative said it was "really tricky" at the moment because there are affordable homes but the owner's interest rates are still "quite high".

"They're still obviously wanting those higher figures," they said.

"I think it's more owners' understanding of the market and that if we can get someone in there for $20 a week less than we originally thought straight away, rather than having it on the market longer, it will be better for the owner in the long run and easier for tenants to find a property."

With a vacancy rate of eight per cent for rentals in Bathurst, real estate agents are finding COVID to be the cause.

Emma Galea, senior property manager for Elders Emms Mooney, said through the pandemic there wasn't enough stock for demand so vacancy rates were very low.

"Now with interest rates hikes and the rise in cost of living we are finding more properties are sitting slightly longer on the market as we don't have the demand in the Central West that we did at the height of the pandemic," she said.

"We have however found that in the pandemic a lot of people were working from home and moving out of the city, we have seen a significant drop in this."

Between eight and 12 people are typically applying for each property and it's taking between eight and 14 days for properties to be snatched up.

With rent increasing in the Bathurst area, Ms Galea said average increases between $10 and $20 were in line with current market values and the condition of the house.

"There isn't much to rent so people are coping the rent increase rather than moving as this is a large cost," she said.

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