Homes for rent in Northern NSW decrease in availability

More people moving in, less people moving out and a lack of new housing are driving a trend experts say is only going to intensify as summer sets in.

Real estate agent Braden Walters says up to a third of his rental queries are from peopl in metropolitan areas looking to escape lockdowns. Picture: Javier Encalada

The number of homes available for rent in Northern NSW has dipped again to just 1.3 per cent.

More people moving to the area, fewer moving out and a lack of new housing are fuelling a perfect storm for those seeking rental accommodation.

The rental squeeze has locals competing for whichever home they can find, and even moving in before the current tenants have moved out.

Braden Walters, who is principal at Belle Property Byron Bay and Lennox Head, said the recent lockdowns had not helped an already tight situation.

“But it also stems from the lack of approvals for buildings,” he said.

“If builders cannot finish houses, there is not enough supply.”

Data from the Real Estate Institute of NSW shows the vacancy rate for the Northern Rivers in August was just 1.2 per cent.

Institute CEO Tim McKibbin said the July rate was higher, at 1.5 per cent.

“The market has contracted again, but it’s nowhere near as small as it was back in March and May in that area, when it hit 0.3 per cent,” he said.

Real Estate Institute of NSW CEO Tim McKibbin says rental availability has dropped in the Northern Rivers.

He said a global shortage of building materials and issues getting them though state borders as well as recent changes in the development approval process by the NSW Government and specific circumstances in certain councils had resulted in longer approval time frames.

Mr Walter said if building approvals were on average under the 90-day turnaround, the housing squeeze would gradually ease.

“More people are fighting for less properties and many are offering more money to secure them and eventually it just gets too expensive,” he said.

“A number of our clients and potential landlords are frustrated at council due to the lack of speedy, reasonable approvals.”

He said approvals would normally take three months but that had blown out to 12 months.

“The person that ends up copping it is the tenants, who are desperate for a house to live in but end up suffering because landlords or investors cannot build fast enough,” he said.

“It’s a perfect storm.”

Mr Walters said rentals prices in the area had increased five to seven per cent in the past quarter and about 17 per cent this year so far.

Nobody is moving out, everyone is moving in

In between 2019/20 and 2020/21, the number of people moving into the Byron Shire went up by 33 per cent, according to the Regional Movers Index.

Released by the Regional Australia Institute and the Commonwealth Bank, the report found most of people who moved out of capital cities moved to densely populated areas such as the Gold Coast and Sunshine Coast in Queensland, Wollongong and the Hunter in NSW and Geelong in Victoria.

Institute chief economist Dr Kim Houghton said Byron Shire and the surrounding area was the “poster child” for the market squeeze due to migration from metropolitan areas.

He said the Byron area was a victim of its own success.

“Byron has been a poster child for the ‘careful what you wish for because it can cause you all sorts of trouble’ change,” he said.

“For the full financial year 2021, there was a third more people that moved to Byron Bay than in the previous financial year.

The net migration into the Byron Shire was one per cent of all the net migration in the country, added to the fact that people are not moving out, Mr Houghton said.

“There has also been a reduction in Byron in the number of people moving out of that area, like in most parts of the North Coast,” he said.

“There is usually a flow of people moving to cities, Melbourne and Brisbane in particular, that has really slowed, so you have people staying as well as an increase of arrivals by a third, which has really fuelled this ridiculous tightness in the market and very significant price rises in Byron in particular.”

Mr Walters said a third of his rental queries in Lennox Head were from metropolitan areas, such as south west Sydney residents looking to escape lockdowns.

“They inquire about Byron Bay first, then they look into Lennox Head and Suffolk Park, and then they look into Ballina and Lismore, also into Evans Head and Yamba,” he said.

“We are getting 12 to 18 calls a day from prospective tenants from metro areas, these are people who get the correct permits, or we do virtual tours of the properties via Facetime, some of them don’t even see them before they move in.”

He believes the market will heat up again.

“It happened in June when the market was quiet for a while and then it heated up again and it will probably happen again in November when vacancy rates will probably get close to zero.

“The same may happen with home sales but really, why wouldn’t people want to live here?”