The Greens have hinted at imposing an effective rent freeze across Brisbane in a new policy prescription. Brisbane landlords would be hit with a 650 percent rates surcharge if they increase their tenants’ rent, under a new policy from the Greens aimed at subduing rental price increases nationwide.
The policy is set to be announced by the Greens today and constitutes part of the minor party’s ambitions in taking control of the Brisbane City Council at the 2024 election.
The policy proposal would ensure that any landlord who increases the rent of their property beyond what was charged on Jan. 1 would pay 750 percent of the council rates bill, equivalent to a 650 percent surcharge.
Various Greens MPs have long advocated for government-imposed rent freezes. Housing spokesperson Max Chandler-Mather in late last year claimed they would help alleviate both Australia’s rental and cost-of-living crises.
“Over the last 12 months, renters paid an extra $10 billion in rent, while property investors pocketed $8.5 billion in federal tax concessions, which is desperately unfair and a reminder that right now politics really only works for the rich,” Mr. Chandler-Mather said.
“The Federal Budget has projected that over the next two years real wages will continue to decline while rents skyrocket and let’s be real, that will see Australia lurch into a major social crisis, unless Labor finally shows some leadership and freezes rents.”
Mr. Chandler-Mather was also adamant that had the government imposed a rent freeze throughout 2022, households would have been $5,000 better off at the end of the year.
“The average renter would have nearly $5,000 more in their pockets this Christmas if the government had frozen rent increases over the last 12 months.”
Housing Affordability Crisis
Australia is currently in the midst of a rental crisis. Rental vacancy rates—the number of dwellings available to rent—have recently plummeted to record lows, pushing upward pressure on rental prices themselves.A report from PropTrack, a real estate market analysis company, reveals that the number of new rental listings has declined 5.7 percent from the start of the year to September. In fact, September experienced the fewest listings seen in over a decade.
In addition, the national median weekly advertised rent on major listing sites was recorded at $550 per week at the end of the September 2023 quarter, an increase of 3.8 percent over the quarter and 14.6 percent over the year.
The report also reveals that the trend is being primarily driven by predicaments in Australia’s major capital cities, with supply and demand beginning to find equilibrium in smaller capital cities and regional areas.
Rates of immigration have also been a contributing factor to the crisis.
According to the Australian Bureau of Statistics (ABS), Australia’s population grew by 2.2 percent reaching 26.5 million people in the 12 months leading into April 2023, equivalent to 454,400 arrivals. In the same timeframe, median weekly rental prices in Sydney alone have increased by just under 26 percent.
Economist and Managing Director at SQM Research Louis Christopher believes the Albanese government must be conscious of the fact that increasing levels of immigration could ease cost-of-living pressures but only at the expense of housing affordability.
“The government can’t shy away from the fact that by putting the pedal down on immigration they might be able to help create a soft landing in the economy, but doing it at a time when the No Vacancy sign is out across Australia will make our housing rental crisis far worse if they’re not careful,” Mr. Christopher said.
“We will experience a rise in homelessness. We cannot just switch on supply tomorrow.”
If Australia is to maintain current rates of immigration, positive supply shocks will need to occur within the housing market to place downward pressure on both rental and purchase prices.
In aiming to fill supply shortfalls, the Albanese Government has passed one of its key election promises, the Housing Australia Future Fund (HAFF). The fund, totalling $10 billion, aims to help deliver 30,000 new rentals in its first five years of existence.
The HAFF is just one component of the government’s ambitious housing reform agenda. It has implemented a national target to build 1.2 million new homes as well as created a $3 billion New Homes Bonus, $500 million Housing Support Program, and $2 billion Social Housing Accelerator.
Numerous builders and property developers have issued warnings regarding the government’s target to build 1.2 million well-located homes over five years to mid-2024, claiming it will not be possible given the current circumstances facing their respective industries.
According to data produced by the Australian Security and Investments Commission (ASIC), 1,709 construction companies entered administration between July 2022 and April 2023 amid high interest rates and prices for materials.
