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Australia is presently in the grips of several crises — the cost-of-living crisis and the affordability crisis have been the two headline grabbers since the start of the year — but is the most pertinent one the ever-rising rents?
According to Emily Sim, chief executive officer for property management at Ray White, it is, with the Australian property management industry is “currently battling through a third wave of afterglow” induced by several factors such as major tenancy reforms, emergency and temporary tenancy legislation and an exodus of burnt-out property managers, all of which negatively impact the rental market.
The Greens’ recent demand for a two-year rent freeze due to claims by the party that Australia “desperately need legislated protections against unfair, arbitrary evictions and skyrocketing rents” was slammed late last month by both the Real Estate Institute of Australia and Prime Minister Anthony Albanese.
Ms Sim described such a request, which also included provisions for the removal of termination options for landlords, as an “outlandish stab in the dark”, as she questioned who the cost of living would be transferred to if such a freeze was implemented.
“Property investors by and large are the parents of Australia, that is the way our economy and tax system is structured. Own property, receive tax relief,” she said.
Moreover, she touched on the major tenancy reform about to be introduced across Queensland, set to come into effect next month, which includes guidelines for minimum housing standards as well as removing the right for property owners to end a periodic tenancy, and the fact Victoria is beginning to recover from a similar string of changes introduced last year, and how these factors, in addition to a rental cap, may further deter investors and potentially encourage more to sell.
She expressed her view that attention should be diverted towards the housing shortage plaguing the country, brought on by slowed planning and construction during the pandemic, which she posited are the root of the crisis.
Ms Kim suggested that despite public housing declining since the 1970s, increasing the amount of public housing could ease the burden on the general public to pay tax, simultaneously providing an increase in public and key worker housing.
In her eyes, the “government funded rent assistance has improved but a housing shortage remains and those requiring public housing are still struggling to keep up with the rising cost of rent”.
She concluded that Australia is losing public housing each year, despite the continued growth of social housing increasing each year, having a heavy influence on the current crisis.
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