Rental arrears surge in NSW as landlords hike rent at triple the rate
The number of tenants falling behind on their rent has surged by almost 50 per cent, as the real estate industry is smashed by cost of living increases across the board.
Tenants are falling behind with rental payments as the cost of living soars.
Data released from a document signing tool used by property managers shows the number of rental arrears notices issued since January this year surged 45 per cent across NSW as landlords hiked rents at more than triple the previous rate.
The report from FLK IT OVER found there had been a 220 per cent spike in the number of notices to increase rents, issued over the past six months as landlords wound back previous discounts amid a rising interest rate environment.
It comes as property owners brace for further rate hikes after the Reserve Bank warned it could increase the cash rate to 2.5 per cent to counter rising inflation.
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A massive preference shift back to the city has put further pressure on the market, with rents tipped to rise another 7-10 per cent in the coming year.
PropTrack data shows demand soared across Sydney in the 12 months to June, with the number of potential renters per listing 96 per cent higher in some suburbs.
The increase in demand coupled with a decrease in available housing meant rents were likely to keep climbing after having already increased 6 per cent across the board.
After working 20 years in the real estate industry, FLK IT OVER founder Andrew Colagiuri said he was shocked by the jump in arrears.
“The data looked at notices issued for over 300,000 rental properties for the first six months of this year in NSW and it was a surprise to us at the speed of the change,” Mr Colagiuri said.
“It’s a concerning jump that shows tenants are feeling all the current factors around cost of living and inflation.”
He said a lack of rental housing had created more competition between prospective tenants, who were outbidding each other to secure a home.
This had driven up rents across the broader market at the same time the cost of household goods and power had also skyrocketed.
“We are not seeing the market being driven by greedy owners,” Mr Colagiuri said.
“It’s the knock on effect of significant changes to interest rates and cost of living that’s affecting everyone in the property ecosystem.”
He said rents in the inner ring of Sydney had increased more than 6 per cent this year.
“In NSW, rents for one bedroom units have increased 5.27 per cent while two bedrooms are up 4.07 per cent in 2022,” he said.
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Originally published as Rental arrears surge in NSW as landlords hike rent at triple the rate