The National Rental Affordability Scheme (NRAS) has been labelled as “virtually obsolete” with more government support needed to provide better assistance to Australian renters, First National Real Estate said.
“While we support the NRAS, it is no longer enough in its existing form, to meet rising rents, leaving those most in need of assistance flailing in their efforts to make ends meet,” First National Real Estate national communications manager Stewart Bunn said.
“It could soon be the case that with falling house prices, lower interest rates and reduced consumer confidence, purchasing a home will make more economic sense for those doing it tough, where the monthly mortgage is not too far off what they are paying for rent.”
Recent home value index results have found housing affordability is improving; however this remains at odds with national rental values, which continue to soar, Mr Bunn said.
As a result, First National Real Estate are calling on the state governments to change the NRAS so it has more relevance and assist renters currently struggling to meet weekly rental repayments in a rising environment.
“In these situations, the [renters] need access to assistance schemes that meet their circumstances and offer real assistance. The NRAS initially did, but has since failed to recognise the growing demand of assistance required, making it virtually obsolete,” Mr Bunn said.
“We don’t see property market conditions altering too dramatically in the near future, and certainly not to the extent that they will improve the situation for struggling renters.”
Recent data from SQM Research supported these claims, with October recording another “excessively tight” national vacancy rate of 1.8 per cent.
“For the mean time we do not see any light at the end of the tunnel where the rental market is concerned,” SQM Research managing director Louis Christopher said.
“The trends remain the same with no change in sight.”
Vacancy rates have remained consistently tight in recent months, with October recording a slight fall of 0.1 per cent – with total vacancies now sitting at 45,896 nationally.