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For so long, the loudest social discourse surrounding the national rental crisis has aimed to pit landlords against their tenants. But one of the nation’s leading real estate bodies believes this is misplaced energy.
While the microscope seemingly always fixates on the dynamic between landlords and tenants during any debate around the rental market, Joe White, president of the Real Estate Institute of Western Australia (REIWA) believes the debate should centre on the “key issue, which is supply and demand”.
Throughout the last decade, Western Australia “hasn’t built enough houses to meet population growth” in his eyes. This, alongside a significant influx of investors fleeing the state’s market, has led to supply plummeting and demand skyrocketing, sending vacancy rates down and rents up.
“These are natural market forces in action,” he explained.
He added the state’s housing stock needs to come from somewhere and with governments failing to adequately provide enough housing supply, he said investors are paramount in ensuring a healthy rental market.
Investors comprise 85 per cent of the state’s private rental market, with seven in 10 having just one property.
These mum-and-dad investors, as they are colloquially referred to, view their investment properties as their “retirement nest egg, their superannuation, [and] a future for their children”.
“They’ve worked to be able to afford another property, and it is hard work because when you crunch the numbers, rental income rarely covers mortgage repayments, especially when mortgage repayments have risen about 45 per cent since May 2022,” he added.
Often, investors are villainised within Australian society as the cause of the nation’s rental crisis. Mr White said this debate, and the negative light often shone on investors, is adding to the pains of owning an investment property, which many concede is “getting increasingly harder”.
While Mr White noted the importance of laws aimed at treating tenants fairly, he urged those laws must “allow investors their assets appropriately”.
“What we don’t need is political parties playing with the market,” he remarked.
He described seeing state and federal governments shift their focus from implementing highly controversial rent freezes as “good”, especially when considering the negative impacts these “artificial restrictions” have on the property market.
Instead of icing rents, Mr White asserted the property market needs “more land, improved planning processes, the capacity to build on that land, and the encouragement of solutions like build-to-rent and rent-to-buy”.
“Increasing supply is a slow process,” he conceded, before concluding that it’s “great to see governments taking these steps”.
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