The Australian Greens proposal of introducing a two-year emergency rent freeze across the country will do nothing to solve the rental crisis, according to industry bodies.
Real Estate Institute of Australia (REIA) President Hayden Groves said the proposal lacks “fundamental understanding” on key issues that will help Australian renters.
“The real estate industry, particularly, property managers and owners, have implemented the rental eviction moratorium during the past two years of the COVID-19 pandemic," he said.
“At the same time, rent has increased in areas where there is a chronic shortage of supply and unless this is addressed, the situation will worsen.”
Mr Groves said the proposal, while well-intentioned is unrealistic, and the governments, from state to federal, should focus more on encouraging supply and investment in private property markets.
“Without more houses and more investors, supply issues will continue to worsen,” he said.
Propertyology head of research Simon Pressley said such proposals will “punish” and restrict those who fund more than 90% of Australia’s total rental pool and would, in turn, just create a more dire shortage in the rental market.
“Landlords will not cop a cap on their income-earning potential on the chin — lots of them are already fed up from being consistently squeezed,” he told Your Investment Property.
“Many landlords will sell and tens of thousands of tenants will be displaced and will have nowhere else to go. When that happens, the blood will be on the hands of politicians who refused to support rental supply policies.”
How the rent freeze proposal is supposed to work
Under the Greens’ proposal, the National Cabinet would agree on national tenancy standards that include a two-year emergency rent freeze, ongoing rent caps, and an end to no grounds eviction, minimum standards for rental properties, and tenants rights.
Greens spokesperson for housing and homelessness and MP Max Chandler-Mather said rents have grown seven times faster than wages in capital cities over the last 12 months.
“Rents are out of control, millions of Australian renters are struggling to pay the rent, and 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,” he said.
After the two-year rent freeze, rents will be subject to 2% increases every 24 months. This would allow wages to catch back up with rents by 2029 — this is based on wages and rents at the beginning of the pandemic in 2020.
“We’ve got families sleeping in their cars, workers unable to afford a home near where they work, people being evicted from their homes because they can’t afford 20% rent increases and the governments just sitting on their hands when they have the capacity to intervene and stop the worst of this crisis."
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