Rent squeeze: Colac’s housing shortage continues to worsen

Evidence continues to mount that Colac is facing one of the worst housing shortages in the state, with a new report naming the city among Victoria’s most desperate for rentals.

It comes as huge demand means more homes are filled before even hitting the market, pushing more families to the brink of homelessness.

A RentRabbit rental crisis report this week listed Colac as number three in Victoria’s top seven suburbs that are desperate for more stock.

The report indicated Colac’s vacancy rate – which shows how many rentals are on the market for 21 days – dropped to just 0.6 per cent in June, from 1.6 per cent at the same time last year.

The data highlighted the worsening squeeze, with Colac’s median weekly rent jumping from $320 in June last year to $380 – nearly 20 per cent in 12 months. It meant an average 39 per cent of household income was spent on rent in Colac, the report said.

Colac property manager Emma O’Shannassy rental properties were lasting no longer than a week on the market, at best.

“They are basically leased within a day of the first open for inspection,” Ms O’Shannassy said.

“We currently are leasing a lot of homes before market due to having a large list of pre-approved renters looking for a place to call home.”

She said the city’s rental market was incredibly competitive, with most advertised properties receiving about 20 to 25 inquiries – and most, if not all, attending open homes.

Ms O’Shannassy said renting law changes last year and record house prices had pushed some landlords to sell their investment properties, meaning more people were competing for fewer homes and stretching their budgets. And everyone was affected, not just one demographic.

“We have people calling on the daily and a large list of people on our books so desperate for a property willing to do absolutely anything to secure a home,” she said.

“It’s quite sad at times knowing that more than one person is currently homeless, or only a few days away from being homeless at no fault of their own.”

A 2020 US study found a median $100-a-week rent increase could cause a nine-per-cent rise in homelessness.

Ray White chief economist Nerida Conisbee said the gold-standard solution to rent shortages was to build more homes, with a keen focus on the build-to-rent sector.

“Right now, mum and dad investors provide almost all of Australia’s rental housing,” Ms Conisbee said, flagging that big corporations and developers had invested in providing rental accommodation that they owned across the past two years and the sector was likely to grow.

She warned that although government-imposed rent control “sounds like a good idea”, it could lead to less rental housing and poorer-quality homes.

“Investors are deterred by poorer returns and existing owners spend less on improving and maintaining homes.”

Meanwhile, high rents could mean bad news for more than just renters – “For homeowners, (the jump) in rents means the likelihood of a rate rise also increases.”