The Hunter’s private rental market has been largely unaffected by the COVID-19 pandemic with rents across the region showing solid gains in the year to September.
Compass Housing economist, Martin Kennedy, said the local market has been remarkably resilient compared to Sydney where rents in some areas have fallen by as much as 20%.
Mr Kennedy said that data from the NSW Government Rent and Sales Report September 2020 quarter shows that, overall, rents in Newcastle are up by 3.7% compared to the same time last year. Lake Macquarie and Port Stephens have performed even better with rents up roughly 5%, while in Cessnock median rents have jumped by 7.3% over the course of the year.
“This is obviously good news for landlords, but bad news for renters, particularly those on lower incomes, who may have lost their jobs due to COVID-19,” Mr Kennedy said.
Across the Hunter region roughly 16,000 more people are out of work compared to the start of the year. The unemployment rate in Newcastle increased to 9% in September after falling to 7% the previous month but remains below the June peak of 11.1%.
Mr Kennedy said the combination of higher unemployment and rising rents was concerning.
“We know that JobKeeper and the coronavirus supplement were the only things keeping a lot of people’s heads above water,” he said.
“With those payments being phased out, and rents still rising, there is a strong chance we could see an increase in housing stress.
“That’s not just bad for the individuals and their families, it’s bad for the wider economy as well because people struggling to keep the roof over their head have less to spend on other things which hurts local businesses.”
He said the resilience of local rents highlighted the need for greater state and federal investment in social and affordable housing.
“Even before the pandemic, approximately 40% of renters in our region were in housing stress and around 2,000 households were on the waiting list for social housing.”
“As well as the obvious social benefit, investing in more social and affordable housing is a proven job creator so it’s a genuine win-win.”