Australians must brace for more housing anguish as the number of available rentals dwindle to all-time lows.
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The latest report from PropTrack revealed Australia's national vacancy rate has hit 1.1 per cent after experiencing its largest monthly drop in more than a year.
Three of the capital cities - Brisbane, Adelaide and Perth - have vacancy rates below one per cent.
Across the country, the number of available rental properties halved since the beginning of the COVID-19 pandemic.
Economist and report author Anne Flaherty says the situation is unlikely to improve in the near future.
"Conditions are really tough for renters at the moment," she told AAP.
"The fact that the population is growing, that the supply of new housing is slowing - what this implies is that we're not going to see a change in these conditions any time soon.
"I think it could get worse than it is at the moment."
Sydney's vacancy rate fell 0.19 of a percentage point to 1.1 per cent and Melbourne hit 1.19 per cent after falling point 0.1, while Canberra had the highest vacancy rate of any capital at 1.72 per cent despite recording a 0.26 percentage point drop.
Darwin was the only city where available rentals increased, rising 0.17 of a point to 1.7 per cent.
One of the factors driving low supply is the smaller household sizes.
During the pandemic, there were fewer people living in each dwelling and the average household size shrunk. This created demand for about 200,000 extra homes.
However, this trend has begun to reverse and is expected to continue on its trajectory over the coming year.
The limited supply of rentals is also expected to continue driving rent increases, with many Australians now spending more than the recommended one-third of their income on housing while struggling with the cost of living in other parts of their life.
Landlords are also increasingly taking their properties off the rental market because the costs associated with it have increased, and they are not always covered by steep rent hikes.
"For some of them, the math isn't working out anymore and they're selling up," Ms Flaherty said.
While this is good news for those who want to buy homes, it decreases the rental stock.
"The reality is we need more rental properties," Ms Flaherty said.
"A third of Australians are renters and new Australians are more likely to be renters as well."
Though governments could help address the rental crisis by increase rent assistance schemes, there are almost no other solutions that could address the issue in the short-term.
And any plans to increase the housing supply takes years to plan and build.
"There is no one silver bullet fix to this," Ms Flaherty said.
"Governments need to work together to explore all options for increasing housing supply - not just increasing affordable housing but making it easier for build-to-rent developments to happen, making it viable to remain a property investor, working on those barriers to the development of new housing."
Australian Associated Press
