In this instalment of In the Know, our conveyancing solicitor Emily Thorn met with Andrew Palmer, director of The Property Shop, to discuss the current difficulties faced by buyers and renters alike in accessing accommodation in the Mudgee region.
Andrew agrees that we can start to call it a crisis.
"It’s an issue. We see it on a frontline basis from more of a tenancy perspective. We have a market at the moment where our vacancy rate is under 0.2%. We essentially haven’t got any vacant properties. Unfortunately, the people that feel that the most are the people that can least afford it."
Andrew explained that the current housing affordability crisis is the result of a combination of factors. In the rental market, increased rent is not always driven by investors. Desperate tenants are offering more in weekly rent in an effort to secure a property, which in turn increases the “market rent” for other comparable properties.
In addition, an increase in house prices has resulted in investors having to pay more for their investment properties, so they’re looking to ensure that their returns are commensurate with that increase.
Andrew identifies that it is not simply the private market at play. He says that the crux of the problem lies in decades of successive governments pushing social housing to the private sector. They have relied on the private sector to provide rental accommodation, but in recent years the pendulum has shifted and investment housing for landlords is becoming less attractive.
Landlords are taking advantage of the good market and cashing out, and not reinvesting.
So if long-term rentals are becoming less available, should we look to restrict the amount of short-term holiday rentals available in Mudgee?
Andrew says that the holiday rental market is an easy target for those looking for someone to blame, but it’s not the root cause of the problem.
Unfortunately, Mudgee has a problem created of its own success. We’re a desirable location for people to live. We have no new land releases, due to the process being too slow. People who would otherwise be in a new house are instead renting while waiting over 12 months for their land to register.
Andrew identifies that the Government has a large part to play, by both investing in social housing and how it chooses to go about that. Andrew notes that there is social housing already in Mudgee that can be better utilised to increase available occupancy. In addition, the current density limits within the Mudgee township can be revisited to determine whether small apartment complexes could be developed.
Finally, large industrial developments planned for the Mudgee and Mid-Western Region are relying on vacant rental properties that simply don’t exist. A better alternative to relying on an already stressed market would be to require developers to provide onsite accommodation for a portion of their workforce.
You can check out McGrath Mudgee and Central Tableland's current listings here:
Emily Thorn is a Property Lawyer at Sally Callander Law. She prides herself on delivering trusted advice and building long-term relationships that help her community continue to grow and thrive. Contact Emily today on (02) 6395 9780 to book an appointment.