Rent rise pressure

The cost of renting a house or unit in Baw Baw Shire has risen eight to 10 per cent over the past year.

Local real estate agents say the number of rental properties has tightened a little but nowhere near to the extent of reports on availability of homes in major cities including Melbourne.

They say residents in the shire most feeling the effects of rising rental costs were those on low incomes including pensioners.

Agents spoken to by the Gazette said in the district’s two major towns, Warragul and Drouin, said there were very few houses now available under $400 a week and the average cost was around $450. Higher prices of $520 to $550 were being paid for reasonably new or larger than three bedrooms homes.

One and two bedroom units cost about $270 on average.

Geoff Quirk of Hocking Stuart in Warragul and Shane Candappa of Candappa First National at Drouin said most demand was from local people and across all segments of the community including young adults ready to move out of the family home, people waiting for completion of houses they are having built, growing families and family break-ups.

There were also a number of contract workers on one and two year projects and others transferred to the area in their employment requiring accommodation, many of whom receive employer rental subsidies.

Mr Quirk and Mr Candappa said despite increasing rents a number landlords hade sold rental properties, or were considering it, adding to pressures in the market.

They agreed the main reasons investors were selling up were increased interest payments on investment loans, higher insurance costs substantially driven by natural disasters of recent years and higher building costs to repair and replace houses, added costs of more stringent government regulations applying to rental properties and increased municipal rates and charges.

Mr Candappa described it as a “Catch 22” situation for landlords that didn’t want to lose good tenants but needed to increase rents to cover rising overhead costs and were looking for better investment opportunities with fewer risks.

Mr Quirk said some landlords had sold because they found the extra costs “too hard”.

Most rental properties that are vacated take only about three weeks to be re-let through real estate agents with the tighter market placing more emphasis on due diligence into applicants’ previous rental histories and their ability to meet the current market rental rates.