Dec. 1, 2023

Calls for rent caps grow as crisis deepens | The Business | ABC News

Published May 13, 2023, 6:08 a.m. by Naomi Charles

As the economic crisis deepens, calls for rent caps are growing louder.

The business community is divided on the issue, with some saying it would be a disaster for the economy, and others arguing it is the only way to protect tenants from being priced out of the market.

The debate has been sparked by the release of the latest figures from the Australian Bureau of Statistics, which show that rents have increased by more than 4 per cent over the past year.

This is well above the rate of inflation, and is putting immense pressure on households already struggling to make ends meet.

The situation is particularly dire in Melbourne and Sydney, where rents have surged by more than 7 per cent.

This has led to calls from some quarters for the introduction of rent controls.

The Victorian Tenants Union is one of the groups pushing for this change, and it has the support of the state's Opposition Leader, Daniel Andrews.

Mr Andrews says that without rent controls, "we are just sleepwalking into a housing affordability crisis".

"The only way to really deal with it is to put a cap on what landlords can charge," he said.

However, the business community is strongly opposed to the idea of rent controls.

The Property Council of australia says it would be "a disaster for the economy".

"It would lead to less investment in housing, less construction and fewer jobs," said Ken Morrison, the council's chief executive.

Mr Morrison said that if rent controls were introduced, investors would simply pull out of the market, and this would push up prices even further.

He said the only way to solve the housing affordability crisis was to increase the supply of housing.

"The solution to housing affordability is more housing," he said.

"We need to increase the supply of housing by making it easier and cheaper to build more homes."

However, not everyone in the business community is opposed to rent controls.

Some argue that they are the only way to protect tenants from being priced out of the market.

John McGrath, the founder of McGrath Estate Agents, said that while he didn't like the idea of rent controls, they may be necessary in the current market.

"I think it's something we have to look at," he said.

"I don't like the idea of government intervention, but in this market, with rents going up so much, we have to do something to protect tenants."

Mr McGrath said that if rent controls were introduced, they should be coupled with measures to increase the supply of housing.

"Otherwise, you're just going to make the situation worse," he said.

You may also like to read about:


Jacob Harrison rents his home with two

other students it's pretty depressing

looking in my pantry at the moment I'm

working three jobs and receiving ice

study and still I'm you know barely

making it

Jacob welcomes the increase to rent

assistance but says the extra Thirty One

dollars of fortnight won't go far and

he's worried it'll get sucked up we had

a inspection last week and

um obviously it went quite well but you

know they'll find repairs and things

that need doing and it's also an

opportunity to raise rent

we've had a rental assistance increase

they may see that as justification to

raise it by just that much I know it's a

little cynical of me to believe that but

you know it there's nothing to stop them

housing analyst Eliza Owen believes that

cynicism might be warranted very tight

rental markets right now mean that any

additional income supplements could

actually be passed through to higher

rents vacancy rates nationally are still

near one percent according to core

logic's data there's not a lot of limit

on how much landlords can increase their

rent by and at the moment landlords have

a lot of power building public and

affordable housing is the government

steps the greens are calling for a

rental freeze for 24 months followed by

capping increases at two percent per


this is the worst housing crisis in

Australia's history since World War II

and we need to take it seriously

housing Economist Cameron Murray says

it's up to the states to limit how

quickly landlords can raise rents the

ACT is the only place in Australia that

has a limit on how quickly that rent can

be increased and that limit is CPI times


he says that overseas in places like

Germany and Amsterdam governments are


ranks the political calculation at the

end of the day comes down to are the 17

of households were landlords more

important than the 33 percent of

households who are renters

Scott Levin is one of the 17 he owns not

one but 10 investment properties if

they're going to do a rent freeze a lot

of investors and especially mum and dad

investors they're going to lose their

properties when our Market struggles

people sell when people sell rents go up

even further we need ways to encourage

investors not encourage investors

he also thinks that landlords will find

ways around rent controls they're going

to remove the tenant out of the property

they're going to increase the rent to

where it's going to go to which means

every year there's going to be more

tenants looking for properties

Economist Joey Maloney says fixed rents

also put people off moving and what that

means over time is that people end up

staying in housing that doesn't suit

their needs if no one else is moving

there's not a flow of new housing for

you to move into so it increases the

risk of homelessness freezing rents is a

divisive policy especially in a free

housing market but some economists are

calling for a cap on increases to prices

that's in line with inflation especially

given the vacancy rates in our rental

market are expected to stay so low for

years to come long-term rental caps are

not a popular option and they might not

be advantageous for delivering more

Supply but in the short term it could be

a solution to protect some of the most

vulnerable households


Jacob Harrison wants something done soon

we've had welfare for the wealthy for so

long it's about time that you know we

just try and even things out a little

bit I'm not talking socialism I'm just

talking like common sense

in the meantime he's relying on his

landlord's Goodwill



Similar videos


Created in 2013, 2CUTURL has been on the forefront of entertainment and breaking news. Our editorial staff delivers high quality articles, video, documentary and live along with multi-platform content.

© 2CUTURL. All Rights Reserved.