Rental fix hinges on more homes

BOOSTING the supply of rentals, particularly social housing, has been identified as central to solving Australia’s rental crisis over the long term.

A Federal Parliamentary committee, which released its final report last week, heard from thousands of renters as well as advocates and organisations on the state of the Australian rental market.

Extremely low vacancy rates have seen rents grow at a fast pace throughout the year, with private analytics company PropTrack expecting upwards pressure on rental prices to continue into 2024 based on their latest property market outlook.

Inquiry chair and Greens senator Janet Rice called for a substantial boost in the supply of social and affordable housing stock, and urged the federal government to quantify how much should be spent each year to make up the shortfall.

The National Housing Finance and Investment Corporation, now called Housing Australia, conservatively estimates more than 377,000 households are in housing need.

Senator Rice also called for mandatory inclusionary zoning for all new developments, which is where planning approval can only be granted if affordable homes are included.

Continued investment in social and affordable housing was also recommended by Labor senators, noting in their additional comments that extra housing of all types would bring down costs.

They highlighted Grattan Institute research that found if home building managed to keep up with national planning reforms and the housing accord target of 1.2 million well-located homes was met, rents could fall by eight per cent.

Coalition senators also urged state, Federal and local governments to increase housing supply as a matter of urgency.

They said boosting supply would help more people out of the rental market and into home ownership.

“You must fix the home ownership crisis if you are to fix the rental crisis – both require a substantive increase in supply,” Coalition senators said in additional comments in the report.

Other recommendations made by the chair included strengthening tenancy rights, as well as a providing immediate relief in the form of nationwide rent freeze for two years.

The Greens have been pushing for a rent freeze and a permanent cap on increases but failed to secure the measures when negotiating their support for the federal government’s Housing Australia Future Fund.

The fund will build 30,000 social and affordable homes in the first five years.

In the committee report, Labor senators acknowledged the “wide range of views for and against rental control measures” but on balance, said they could “ultimately make things worse”.

Coalition senators said speculation over rental caps and freezes had disrupted the market and “spooked mum and dad investors into increasing their rents in preparation”.

Senator Rice said Australia was facing a housing and rental crisis that needed interventions to match.

“This demands crisis-level intervention, we need a rent freeze now, and an increase to all income support payments to lift millions of Australians out of poverty and housing insecurity,” she said.

– POPPY JOHNSTON/ AAP