Over the last 6 months, rental bonds have increased across NSW, Victoria and Queensland by an average of 27%, according to MyBond.
The company, which covers the rental bond for tenants looking to move, has seen the increase in demand for rental properties combined with a shortage of supply significantly raise rental bonds in line with rising rents.
Founder Ray Dib has seen the struggle for thousands of Australians trying to get into the rental market and so he established MyBond back in March 2021 – not realising then just how far the crisis would go.
According to research from AHURI, September 2022 saw a 15.3% increase in weekly rent prices across Australia, which naturally increases the bond tenants are expected to pay.
"We started MyBond because tenants are the largest underserved market globally. We want to reduce the stress load and provide tenants with security, flexibility and allow them the choice to live where they want," Dib said.
Solutions needed to combat rising rental crisis
With mortgage rates increasing and inflation expected to peak at around 8% (meaning a higher cost of living) things could get tougher for renters.
Experts at AHURI have said a number of solutions are needed to combat the rental crisis, including more homes to keep up with the rising population and migration.
Dib agrees, saying, "We need to provide more housing, incentives for long term rentals and make short term rentals less appealing for landlords, which will all help to increase supply.
"In order for this situation to improve, there needs to be significant changes in property development and government reform. All factions of the housing market need to work together rather than in the current silos that exist."
What to do if you're looking to rent
If you're looking to rent in a new property but are struggling to navigate the current market, Dib provides these tips:
Consider why you're looking to rent. Are you already renting somewhere but your rent has increased to unaffordable levels? Do you need to move closer to work? Are you hoping to move somewhere cheaper to save money for your first property? This will help you in your search for the right property.
Decide the maximum you're willing to pay for rent. In December, the average rent in Sydney is $712 a week. Nationally, it's $552.
Look at the costs of moving and balance it against your reasons for doing so.
Go to as many viewings as you can to get a good grasp of what's available in the area and to understand what you're likely to get.
Apply to the ones you like and make it easy for the agent to say yes. If the apartment is less than your budget, you may have room to offer above the asking price or maybe you can pay some extra rent upfront.
If you decide moving might be the right solution for you and you can afford the rent but can't fork out the full bond right now, consider a company like MyBond.
MyBond pays the rental bond upfront for you with a fee of one week's rent. When your bond is refunded you can buy back your bond from MyBond.
Originally published by Finder