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.
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[Music]
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
year
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
1.1
he says that overseas in places like
Germany and Amsterdam governments are
making
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
[Music]
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
foreign
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