“Shocking” Warrnambool rental market hurting youth wellbeing

The coastal town of Warrnambool is currently experiencing a severe rental shortage. Photo supplied.
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The near-zero rental vacancy rate in Warrnambool is placing considerable stress on prospective tenants and youth homelessness services. Lachlan Abbott investigates.

When 27-year-old administration manager Kiara Dean started looking for new rental accommodation in Warrnambool four months ago, she was optimistic.

“We thought we weren’t going to look too bad. Two full-time workers, old enough that we weren’t young party people,” Kiara said.

However, by March, Kiara still hadn’t found a property to rent.

We were just getting knockback after knockback. All the agents that we spoke to were saying they were getting 20, 30, up to 70 applications per property.

After four months of searching and 15 property applications, Kiara and her friend eventually managed to secure a “very little” two-bedroom unit.

Reflecting on her experience, Kiara is unequivocal: Warrnambool’s rental market is “shocking”.

“You’ve got full-time workers with years of rental history that are struggling, so you would assume those with very little or no rental history, wanting to move out for the first time, would find it to be very, very difficult,” she said.

“Shocking” Warrnambool rental market hurting youth wellbeing
Kiara Dean spent four months looking for rental accommodation. Photo supplied.

Deakin University senior lecturer on real estate Dr Chris Ratcliffe said while the demand was “very, very high”, the supply of rental accommodation was “very low”.

“There is a rental shortage in Warrnambool. Vacancy rates are at an all-time low,” he said.

The rental vacancy rate in the southwest Victorian town sits just 0.54 per cent lower than regional Victoria (1.0 per cent) and metropolitan Melbourne (6.5 per cent) averages, according to the Real Estate Institute of Victoria.

Regional Victorian and Warrnambool figures are the lowest seen in at least the last 10 years.

The Impact

Community youth services manager Peter Hill said Warrnambool’s rental shortage was hurting vulnerable youth and increasing homelessness. Peter, who also manages the Youth Homelessness program at Brophy, said the industry was struggling to help.

“It’s a very challenging time to be working in this space. There is a serious lack of affordable accommodation that we have available to us,” Peter said.

It’s always been a challenge, particularly in the youth homelessness sector, but it’s never been this bad in my nine years.

Brophy, a Warrnambool-based family and youth services organisation, currently provides ongoing assistance to about 50 young southwest Victorians dealing with homelessness, some of whom are long-term clients.

Peter said the rental shortage had increased the number of people relying on the organisation, with staff registering 20 new cases of youth homelessness in March and reporting that there could be up to 40 new cases each month.

“The young people who are experiencing homelessness or need to move out of home for whatever reason just have no options,” he said.

Brophy’s transitional housing program is a key support service for vulnerable youth and consists of 16 properties, each housing one client aged 16-25 across Warrnambool.

“It’s a short to medium term program really, to prevent homelessness and provide an opportunity for us to work with them, to develop their independent living skills and increase their chances when they apply for their own, permanent long-term stable accommodation,” he said.

Peter said the lack of private rentals available had created a “bottleneck” in their system.

“We don’t have any exit options for people who are in those transitional properties,” he said.

Warrnambool College Assistant Principal Jenn Penn said the rental shortage had caused some local school students and families to use temporary accommodation.

“If people, for whatever reason, are moving out of their rental homes, there is no other real accommodation. So, they are often resorting to the caravan parks, hopefully for the short term, to then find long term rental accommodation,” Jenn said.

Jenn said she wasn’t unaware of the exact number of families in this situation but estimated it to be “around three families” from the school’s population.

“So, it’s not a huge number for us personally that I’m aware of, but potentially it could be much larger.”

Kiara said she’d also heard accounts of local school families living in caravan parks because of the rental shortage. The Standard was unable to find families in such a situation.

The mental effects

Peter said the shortage of stable rental accommodation was impacting the mental wellbeing of Warrnambool’s young people.

“You definitely see an increase of mental health problems,” he said.

Having no options around where they are going to be spending the night is impacting their morale and their mental health. It’s impacting their motivation.

Peter said even those currently receiving support in Brophy’s transitional housing program were suffering from additional stress.

“They are actually only really eligible to stay in there up to the age of 25, but we’ve had some young people who are now past 25 but remain in there because we are not going to exit them into homelessness,” Peter said.

“That causes an extra level of tension and a level of pressure on those young people … they don’t know really what the future is going to look like for them or where they are going to be.”

Kiara said the rental shortage had caused her to experience uncertainty and rejection, which impacted her wellbeing.

“The uncertainty was probably tougher. Getting knocked back was probably more just frustrating than anything because you’ve done everything you can … and it’s still not happening,” she said.

“You just want to give up, basically.”

Why is this happening?

Property expert Chris said the inadequate release of land for development was one of three major reasons for the current rental shortage.

“In the last 10-15 years it’s been very slow, and the lead time that it does take for development to happen is such a long time that this undersupply has been building up for a while,” he said.

Chris said the second reason was that Airbnb had taken some supply out of the market by encouraging owners to use their properties in the gig economy. While the third contributor driving increased demand was the shifting demographics.

“On the back of Covid, we’ve seen a large movement of people out of the city towards regional areas, which has put even more demand on rental properties here in the southwest,” he said.

Warrnambool property manager Catherine Dorward agreed that population shifts from Melbourne to regional areas were driving demand.

Covid has obviously made an impact in Melbourne, and if they can work from home, why can’t they work from Warrnambool?

Catherine said recent changes to the Residential Tenancies Act had also reduced the available rental accommodation. The numerous rule changes included new rental minimum standards, no eviction without reason, a ban on rental bidding, and more allowable modifications by tenants.

“We in the office believe that a lot of landlords are selling to get away from these rules because some of them are ridiculous,” Catherine said.

However, Chris said the greater rights given to tenants would not further damage the rental supply.

“The yields out there are pretty damn good. I don’t think the new tenancy regulations are going to hit the market as hard as what some commentators are saying.”

How can this be solved?

Youth services manager Peter said new social housing development was needed to support the most vulnerable.

“Social housing can come in a variety of ways, and it needs to be—and is being—supported by the government, but just not to the degree that it should be,” he said.

“There’s models being rolled out like the Homelessness-to-Home model … but it’s very metro-centric. It’s not a model that is really going to benefit us in regional Victoria, unfortunately.”

It seems like the government is trying to roll out a response, but it’s not the correct response.

While some may be reluctant to develop large-scale public housing in a town of roughly 34,000 residents, Peter said it was the only way.

“Beside further establishing public housing and social housing, we are all going to be lost,” he said.

Kiara said the scale of the current shortage could lead to increased community support for faster and more substantial housing development.

“I think there is such a large group of people that are affected by it at the moment, so everyone’s got no choice but to understand it,” she said.

“They are either experiencing it themselves or know someone who is.”