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Rental squeeze is causing problems
PATRICK WOOD
12 Oct, 2010 01:00 AM
The undersupply of rental properties in Wagga continues to cause headaches as residents feel the fallout from the economic downturn.


Fitzpatricks Real Estate's annual property market report warns of a sustained undersupply of rental accommodation that plagues the city.



Director of Fitzpatricks Real Estate Richard Fitzpatrick said the global financial crisis (GFC) was largely to blame. He said it forced many investors to sell up rental properties in order to cover losses. In the past these properties would be bought by other investors, but the GFC caused them to hold off.



Instead, first-time buyers took advantage of increased government grants and snapped up the houses to call their home.



"Investors got squeezed," Mr Fitzpatrick said.



The Fitzpatricks report warns that despite a large number of first home buyers exiting the rental market, there is still an undersupply of rental properties.



Surprisingly, despite the low levels of rental vacancy, median weekly rent prices dropped by 1.4 per cent in the last financial year to $270 a week.



This has the potential to inflate prices as demand outstrips availability.



Mr Fitzpatrick said it was about getting the right balance between availability and rental costs.



"We have been conscious of telling owners 'don't put the rent too high or you will increase vacancies'," he said.