Housing crisis: Byron rents soar; now more expensive than most of Sydney

Regional NSW’s housing crisis requires rent regulation similar to other international cities, experts say, to curb the spiralling cost of towns like Byron Bay, where prices now outstrip most of Sydney.

Industry experts have called on the state government to step in to control the housing crisis in regional towns around NSW as rents continue to rocket to record levels, according to new data, leaving locals under intense pressure.

This flood of competition has raised rents by double digits in the 12-months to March 2021, according to the quarterly Domain Rent Report released on Thursday.

Rents in the Byron Bay council area jumped a staggering 26.4 in the 12 months to $885 a week, making it more expensive than the median asking rent in most Sydney suburbs and on par with renting houses in areas like Balmain, Cammeray and Chatswood.

The rapid rental increases of the past year warranted the state government looking into rent regulation similar to international cities around the world, said Chris Martin, senior research fellow at UNSW’s City Futures Research Centre.

“Rent regulation is a bit of lost art [in Australia]. There’s lots of other places that do it and we should be giving a good hard look,” Dr Martin said. “We’ve got problems now. It’s changed the housing market. It’s affecting low income people in regional markets.”

Many countries, including the United States, Canada, Germany, Ireland and Scotland all have various forms of rent regulation, which caps rental increases, Dr Martin said.

“There are almost as many ways of regulating rent as there are large cities dealing with housing affordability problems,” he said.

According to Chris Hanley, chief executive of First National Byron Bay, which has one of the largest rent rolls in the region, extraordinary circumstances like last year’s COVID pandemic called for government intervention and moderation.

He said it would regulate asking prices in a “measured” way as the free-market idea of supply and demand had failed to ensure tenants had affordable, secure housing.

“The only way you’ll get fairness in community and society in general is when you get a moderate intervention,” Mr Hanley said. “In the housing market, it would be to have some way that rents can’t go up too much.”

The intense rental demand in the past year has meant many prospective renters have often offered above-market rents to secure properties, Mr Hanley said, immediately pricing out locals.

These record rental prices have had a major impact on the local community, who are mostly low-income tenants, Mr Hanley said.

“It’s really detrimental to the fabric of a community. Some people were on more money on JobKeeper than they normally earn… half the community rent. If you’re losing all those wonderful people in our community, then COVID-19 has had a deleterious effect.”

He expected that upward pressure on rents to remain through to winter, a time when the market usually eases.

“We had a housing challenge, but you can call it a crisis now. All these people have lives and families. It’s a struggle.”

Byron Bay was not the only regional town experiencing such staggering rates of rent growth, with demand continuing to rise in popular spots.

Rents in the Eurobodalla Shire Council – which includes the coastal towns of Batemans Bay and Moruya – jumped 22.7 per cent in the same period to $528 a week.

Even inland areas such as Yass Valley recorded eye-watering jumps of 21.8 per cent, taking the asking rent to $530 per week.

The solution to rising rents was not to call on individual landlords to be altruistic, according to Joel Dignam, executive director of Better Renting, a renter advocacy organisation.

“[Landlords] are playing by the rules of the game,” he said. “That’s why we have governments to change the rules of the game when things aren’t working.”

He also backed calls for governments to step in to protect locals from unaffordable, insecure housing.

“There is a big role here for government [to ensure] there are enough homes for people to live in. In the shorter term, it’s perfectly possible for the government to act to prevent these sorts of rent increases.”

“We have to meet what we value in a society, which is creating a stable community.”

The rapid increase in rents in these regional towns had far surpassed wages growth, according to Nicola Powell, Domain’s senior research analyst, forcing many tenants to compromise.

“For some, it may even mean they have to relocate, or house share or rent somewhere smaller,” Dr Powell said. “Nobody’s income would have grown 26 per cent unless they were to have a significant promotion.”

“The only answer to alleviate these conditions is more development and investment activity. The rental supply needs to increase in these areas.”