Real estate industry leaders have said there is "no end in sight" for Wagga's tightening property market and that the only solution is to build more houses.
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Would-be tenants have spoken about feeling "terrified", after seeing dozens of rental applications rejected in a matter of weeks amid the city's ongoing rental crisis.
Figures from real estate agency PRD reveal the median house price in Wagga jumped by 3 per cent over the 12 months to the end of 2020, to reach $380,000.
Real Estate Institute of NSW chief executive officer Tim McKibbin said the coronavirus pandemic had prompted a shift to working from home, enticing more people to move regionally.
The most up-to-date Australian Bureau of Statistics data show that capital cities had a net loss of 11,200 people from internal migration from July to September last year, the largest quarterly net loss on record.
Mr McKibbin was joined by REINSW president Leanne Pilkington in Wagga yesterday as part of the peak industry body's state-wide tour to meet with real estate professionals.
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Ms Pilkington said it was "equally tough" to buy or to rent a home in regional NSW at the moment because available stock and rental vacancies were both very low.
"There's no end in sight to that, as well. There are a lot of landlords who have decided they're going to capitalise on the strong market and sell their properties," she said.
"Most of those properties are going to first homebuyers, so they're not going back into the rental pool."
Mr McKibbin said he couldn't see the situation "improving in the foreseeable future" in part because of the incentive for capital city tree-changers to sell their homes and move to cheaper regional houses.
Meanwhile, charity leaders in Wagga have warned the rental market could be pushing residents towards an increased risk of homelessness.
Community service provider VERTO has seen a spike in Wagga residents accessing their housing and tenancy services.
Of the more than 350 people who have reached out in the past six months, they estimate one-third are at risk of homelessness.
Mr McKibbin believes "more supply" is the only solution and suggested regional cities look at higher density housing, something that Wagga City Council has committed to investigating.
Other ideas have been floated to improve affordability in Australia's skyrocketing housing market such as scrapping negative gearing.
The policy allows losses on investments to be deducted from other taxable income, which critics say benefits those on high salaries who own multiple properties.
Mr McKibbin warned against "interfering in the free market", saying he believed suggestions of taxation changes and federal legislative amendments to be "just irrelevant noise".
"If you want to solve this problem, there is only one way to do it. And that is supply - we just need more property," he said.