So here we are with rents rising capital cities everywhere. What's the answer to this. There's so many places that are too expensive and then there's not enough. So where do we start.
Well, the reality is full that we have a real shortage of properties to buy and also the properties to rent. So what's happening is we've just got this real undersupply and it's we're not having the supply come on fast enough. Even though we've got federal and state governments trying to put incentives in place, they're not building enough and not coming through to completion quick enough to.
Meet the needs.
So we've got this real undersupply and we've got to look at some ways how we can try and, at least from a rental perspective, try and keep the stock that we've got rental properties in the market and not lose those properties.
So we need investors to.
Actually be buying rental properties that can rent out to increase the number of rental properties on the market, but also encourage investors to stay in the market and not to sell, because what we're finding is when investors sell in this ready type market is that it is an owner occupier that's buying that previous investment property, and what that means is one less rental property in the pool of investments of rental properties.
But what's the answer to the owner investor? Where are they going to live?
Though? What we're saying was with the investment.
What I would be recommending is that if we're encouraging the investment is around new builds, that helps with the construction. So I'm encouraging that investors be buying new properties around the country. That keeps the construction industry going, hopefully keeps out a little bit of competition in the established market. So it's a real catch to any two because we're short on properties for owner occupiers and we're also short
of properties on the rental market. So it's a case of getting more supply out of the ground.
What we need with that is we need we need more trades people.
A lot of the problems that we just don't have enough traits normally. What would happen for is we may have two of the capital cities really really going strong on the market in the property market and the others a bit soft, and we may find that tradesmen may move from.
Capital city to capital city for work.
The challenge at the moment is we've got all capital cities and all regional areas really strong capital growth, price growth, and demand for building.
Because it seems that we just seem to go round and round in circles with this, don't we when we never seem to have an answer for what to do?
And you're right there, the problem does on a macro level, does not seem to be changing at all. There's a lot of there's a lot of words being spoken, but it's not improving the situation on the ground and hence why the lack of supplier is leading to prices going up for houses and for rental.
So it's a big problem.
The way that we're going to get the real way out of this is, unfortunately, is not a short term thing where it's a fire ten to twenty year plan that we've Actually we've got to increase the supply. A lot of this supply, most effective supply is going to be come froming from apartment buildings, because an apartment can reside fifty one hundred, maybe two hundred people.
The challenge has been with still in our hangover from COVID.
Is that is that it became very risky for developers to build when they're not really knowing their cost base because input prices were moving and prices are going up, they're very reluctant to commit to projects that take time apartments buildings from beginning to the end, maybe a three four five year commitment.
So what they need to be knowing is that.
They're they're pricing, their pricing is fixed, and if they start selling early with the pre sales, that they can actually make a profit.
And that's been the problems.
Developers have been very unsure whether they can build these very much needed apartments and affordable apartments and still
Be able to make a profit and not make a loss.