The Australian Greens have proposed a national agreement on tenancy standards, which would include a 2-year emergency rent freeze followed by ongoing rent caps.
But the idea has been criticised by the REIQ, which suggested, if implemented, would risk worsening current rental property shortages.
If the Greens idea became law, it would also put an end to no-grounds evictions, introduce minimum standards for rental properties and give tenants rights to make minor improvements to the home.
Under the plan, following the 2-year freeze, rents would be capped at 2% increases every 24 months. Based on wages and rents at the beginning of the pandemic in 2020, the Greens argue this would see wages catch back up with rents by 2029.
The party said Australia has seen the biggest rent increases in 14 years, putting millions of Australians into severe rentals stress and exacerbating regional labour shortages because workers are being priced out of local rental markets.
However, the REIQ has hit back claiming the Greens Bill was based on ideology with limited appreciation of economic, commercial or practical reality.
REIQ CEO Antonia Mercorella said Queenslanders were living in the tightest rental market in the history of our state because the state doesn’t have sufficient supply to meet the ever-increasing demand for rental properties.
“A rent freeze would significantly deter property investment and therefore comes with the real risk of reducing rental supply at a time when we’re already in a rental crisis,” says Ms Mercorella.
“Further, Australia’s building industry relies heavily on investors, so a logical consequence of significantly diminishing investor demand, is that it discourages the construction and development of future housing for investors.”
Greens spokesperson for Housing and Homelessness Max Chandler-Mather MP said an emergency rent freeze would give wages and incomes time to catch up to rents, which over the last 12-months have grown seven times faster than wages in capital cities.
Ms Mercorella acknowledges rents have risen in the last two years due to “extraordinary economic conditions”, however, she says the Greens have conveniently ignored the realities of the last 10 years for property owners, which has seen rents remain “relatively flat”.
Citing new industry research by PIPA (Property Investment Professionals of Australia), Ms Mercorella said rents nationally had grown at only half the rate of inflation for more than a decade – even after allowing for the past year’s rent increases and the current inflation spikes.
On the Sunshine Coast, the rental growth rate was 4.95% per annum for the 10 years from 2012-2022, which Ms Mercorella concedes is a solid return.
“However, if you remove the past two extraordinary years and look at 2012-2020, this is a 2.7% per annum growth rate, which is virtually flat and would mean that investors were making a minimal return,” Ms Mercorella said.
“This analysis shows that investors on the Sunshine Coast have had a long stretch of making virtually no returns from their investments, and the past two years have given them an opportunity to meet the market.”
Mr Chandler-Mather MP argued, for example, the Victorian Government froze rents during the pandemic and “there’s no reason why we can’t do it here”.
He said: “Unless the Government wants to see more families sleeping in their cars, they need to do their job and act now to stop this crisis boiling over into a national tragedy”.
Ms Mercorella said low housing supply was the elephant in the room.
“Until we are able to achieve a greater balance between the demand for rental housing and supply, we won’t be able to fix this critical problem we are facing.”
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