RBA Highlights Housing Shortfall as Key Driver of Rental Crisis
RBA Highlights Housing Shortfall as Key Driver of Rental Crisis
2
The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.
In a fresh perspective on Australia's ongoing rental crisis, the Reserve Bank of Australia (RBA) has shed light on housing supply shortages as the primary cause, rather than the commonly blamed higher interest rates.
The report, authored by Declan Twohig, Anirudh Yadav, and Jonathan Hambur, comes at a critical time when the nation faces intense scrutiny over rising rental prices and the affordability of housing. Despite widespread assumptions, the authors highlight that landlords are unlikely to transfer increased costs resulting from interest rate hikes to their tenants. This perspective is noteworthy, considering the RBA has adjusted interest rates upwards on 13 occasions over the past 18 months.
The analysis reframes the conversation on Australia's rental market, positioning the lack of adequate housing development as the more influential factor. As observed in other global cities experiencing similar crises, such as New York and London, the shortfall in housing creation rather than borrowing costs often stands at the crisis's core.
The backdrop to this report highlights a bigger picture, one that considers urban planning and government policies as central issues to be addressed. By focusing on maintaining a steady construction pipeline, there could be hope for stabilizing the rental market and easing the burden on renters.
An illustrative example of housing projects being delayed or paused could be seen as correlating with the rental shortages. Furthermore, initiatives like tax reforms and incentive structures for developers might stimulate faster growth in housing supply, with potential knock-on effects benefiting struggling renters.
Interestingly, the authors pointed to scenarios in other sectors, such as commercial property, where despite fluctuating interest rates, the availability of market stock generally dictates lease terms and rent reviews, rather than interest financial pressures alone.
Published:Thursday, 17th Oct 2024 Source: Paige Estritori
Please Note: If this information affects you, seek advice from a licensed professional.
Australia's business lending sector is witnessing a significant shift as Japanese banking giants Sumitomo Mitsui Banking Corporation (SMBC) and Mitsubishi UFJ Financial Group (MUFG) emerge as leading growth drivers. In July 2025, the combined business loan books of Australia's top 10 authorised deposit-taking institutions (ADIs) reached A$925 billion, with SMBC and MUFG recording the highest percentage growth rates among them. - read more
In a significant strategic shift, ANZ Group has announced the cessation of its remaining A$800 million share buyback program. This decision is aimed at bolstering the bank's cash reserves to support a comprehensive restructuring plan under the leadership of CEO Nuno Matos. - read more
The Reserve Bank of Australia (RBA) has released its October 2025 Financial Stability Review, providing a comprehensive assessment of the nation's financial system. The report underscores the resilience of Australia's financial institutions, households, and businesses in the face of elevated global uncertainties. - read more
In September 2025, Australian business conditions remained steady, according to the latest survey from National Australia Bank (NAB). The survey's business conditions index held firm at +8, while the business confidence index saw a slight increase of 3 points to +7, both figures sitting just above their long-term averages. - read more
The Reserve Bank of Australia (RBA) has released its October 2025 Financial Stability Review, providing a comprehensive assessment of the nation's financial system. The report affirms that Australia's financial institutions are well-equipped to navigate current global economic uncertainties. - read more
In October 2025, Australian consumer sentiment experienced a notable decline, marking the second consecutive month of reduced confidence. The Westpac-Melbourne Institute survey reported a 3.5% drop in the sentiment index, bringing it to 92.1. This follows a 3.1% decrease in September, indicating a growing sense of pessimism among consumers. - read more
In response to the growing demand for substantial business financing, Sydney-based non-bank lender Prime Capital has unveiled its 'Business Jumbo Loans' program. This initiative offers loans ranging from $5 million to $25 million, with interest rates starting at 8.64% and a loan-to-value ratio of up to 75%. Notably, the approval process is streamlined to provide decisions within 24 hours. - read more
Securing financing is a pivotal step for any startup looking to establish itself and grow. In Australia, the startup lending landscape is buoyant, offering a mix of traditional and innovative financing options. The financial ecosystem is robust yet competitive, and understanding how to navigate it is crucial for new business owners. - read more
Embarking on a startup journey in Australia is both thrilling and challenging. You have a groundbreaking idea, but starting a business involves numerous hurdles—capital being a primary one. This is where business loans come into play. They are crucial lifelines that help convert entrepreneurial dreams into reality. - read more
For many Australian entrepreneurs, a business loan is a vital step towards achieving growth and success. Access to capital can fuel expansion, help manage cash flow, and provide the necessary resources to capitalize on new opportunities. However, navigating the journey from application to approval, and eventually, to expansion, presents its own set of challenges. - read more
Starting a business often requires a substantial amount of capital, which many new business owners may not have readily available. Business loans can provide the necessary funding to help get your startup off the ground, from purchasing equipment to hiring staff and everything in between. - read more
In the dynamic world of business, navigating credit challenges is a reality for many Australian business owners. These challenges can stem from various sources, including unpaid customer invoices, unexpected expenses, or the complexities of managing cash flow. Such hurdles often come at inopportune moments, leading to recurring stress for entrepreneurs trying to maintain a stable financial standing. - read more
In the ever-evolving landscape of Australian business, equipment leasing has emerged as a pivotal financial tool for companies across the spectrum. Whether you're a small start-up or a well-established corporation, the agility to pivot and adapt to market changes is critical. This introduction seeks to shed light on the concept of equipment leasing and its significance in bolstering the operational efficiency of Australian businesses. - read more
In the entrepreneurial world, securing the right type of financing can be the catalyst for substantial business growth and success. Commercial property financing in Australia encompasses a range of options tailored to meet the diverse needs of businesses, each with its own set of advantages and intricacies. This article delves into the heart of strategic financing, providing Aussie entrepreneurs with guidance on navigating this vital aspect of their business ventures. - read more
Need Help Finding a Loan?
All finance quotes are provided free (via our secure server) and without
obligation. We respect your
privacy.
Knowledgebase
Adjustable-Rate Mortgage (ARM): A type of mortgage in which the interest rate applied on the outstanding balance varies throughout the life of the loan.