A CoreLogic RP Data report has revealed a 1.1 per cent rise in the rents across capital cities.

The problem has two worrying consequences: First, the dream of owning a home is staying just that – a dream – as many people find themselves stuck in the rent cycle. This has severe ramifications for the housing market when considered against the new laws restricting overseas buyers from ownership.

Second, because of the agonisingly slow growth in wages it means tenants are hurting. With each rise in rent there are always some at the margin unable to afford their rent. This hurts both the renter and landlord as tenants move out.

Jeff Oughton, the report’s co-author, said, “There’s been a big fall in financial comfort (from 5.28 to 4.35 on a scale of 10) in the first half of this year, and it’s been largely due to the confidence in household’s ability to cope with a financial emergency an having lower cash savings.

“There is also financial difficulty that renters and potential first home buyers are experiencing to get into the property markets as household prices continue to rise strongly in the major cities.

“They’re still faced with sluggish income growth – across the economy yu have only had a third of households get a payrise over the past 12 months.”

Sydney house prices soared by a median 11.9 per cent in the last year; with Melbourne close behind at 10.2. The median price of rents in Brisbane was found to be $435 per week.

The report suggested that two out of every three households would find it difficult to raise $3000 to address an emergency situation and that they have no money for contingencies.

28 per cent of the survey’s respondents admitted they had between $1000 and $10,000 in accessible cash.

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