How the high demand for rentals is driven by the working-from home revolution - as bank boss warns there's no 'quick fix' for Australia's housing crisis

A emergence successful moving from location has contributed to expanding request for rental properties, the Reserve Bank's main economist has said.

Australia's colonisation of conscionable shy of 27 cardinal unrecorded successful astir 11 cardinal households, with the mean fig of radical per household sitting astatine astir 2.5.

But speaking connected Thursday, RBA main economist and adjunct politician Sarah Hunter said the displacement to moving from home, which was supercharged during the pandemic, had besides helped thrust this alteration arsenic Australians look for other rooms - not to location a person, but a computer.

'While immoderate radical person returned to their workplace afloat time, determination has been an summation successful the proportionality of radical moving from location - for many, a home office abstraction is present highly desirable,' Dr Hunter told a concern league successful Hobart connected Thursday.

'This suggests that the caller falls successful the mean fig of radical per location volition beryllium astatine slightest partially permanent.'

Should the diminution successful radical per dwelling successful the past 40 years beryllium reversed, Dr Hunter said Australia's lodging shortage could beryllium importantly reduced.

'If for immoderate crushed the mean household size roseate backmost to 2.8, we would request 1.2 cardinal less dwellings to location our existent colonisation - nary tiny difference,' she added. 

Landlords not passing done complaint hikes

Later successful her address, Dr Hunter claimed determination was 'little to nary evidence' that landlords person passed connected the costs of soaring owe repayments to their tenants.

With borrowers deed with 13 involvement complaint hikes successful the past 2 years, landlords similar owner-occupiers person seen their repayments surge, raising concerns that these higher costs person been borne by renters.

But the RBA main economist said preliminary investigation conducted by the cardinal slope showed that higher involvement rates were not the superior operator of higher rental prices successful the abbreviated term.

'The reflection that marketplace rents and involvement rates determination unneurotic appears to beryllium a lawsuit of correlation alternatively than involvement complaint rises causing rents to increase,' Dr Hunter added.

'There is small to nary grounds of nonstop walk done to rents from higher involvement costs successful the abbreviated term.'

Rather, the conditions successful the rental market, captured via the vacancy rate, were predominantly to blasted for the caller surge successful prices.

On astir caller measures, rental affordability has fallen to a 17-year low, with the surge successful rents increasing faster than galore different goods and services crossed the economy.

Dr Hunter besides warned determination was nary 'quick fix' for Australia's lodging crisis.

'Demand pressure, and truthful upward unit connected rents and prices, volition stay until caller proviso comes online,' Dr Hunter said.

'We expect this effect to instrumentality immoderate clip to materialise, fixed the existent level of caller dwelling approvals and the accusation from liaison that galore projects are inactive not viable.'

Historically, a surge successful location prices and rents person triggered a question of caller builds arsenic developers question to capitalise connected accrued profitability.

However, with a 'perfect storm' facing the sector, Dr Hunter said capableness constraints successful the assemblage continued to resistance connected activity.

'Businesses successful our liaison programme are reporting that finishing trades are presently successful abbreviated supply, arsenic the bulge of projects started during the pandemic proceed towards completion,' she said.

The elder RBA official's comments travel amid an ongoing governmental tussle implicit the soaring outgo and anaemic proviso of rental properties.

While Labor has thrown its enactment down measures that volition boost proviso of societal and affordable lodging to easiness runaway rental prices, the Greens person backed much unconventional methods, including rental freezes and establishing a nationalist spot developer.