Australian renters could have saved over $3 billion in the last 12 months under a rent freeze plan, according to the Australian Greens citing new research conducted by the Parliamentary Library.
However, Simon Pressley (pictured above), head of research at buyers agency Propertyology, said a rent freeze would unfairly penalise investors, saying that the “vicious” Greens proposal has the potential to “create serious civil unrest across the country”.
“It is never acceptable to forcibly limit anyone’s ability to earn an income,” Pressley said.
With rents predicted by the Reserve Bank to rise another 10% over the next 12 months, the Greens said that renters will be in for another $4.9 billion in increases over the next year.
“If decisive action was taken by the federal government when we first saw cost of living increases being unfairly passed on to renters, then renters would have saved on average $3,688 over the two-year period and inflation would be lower,” said Max Chandler-Mather, Greens spokesperson for housing and homelessness.
The findings put pressure on the Labor government ahead of the national cabinet meeting next week, where rental rights will be discussed.
The Greens, which have pushed for a two-year rental freeze nationally, have also opposed the government’s $10 billion Housing Australia Future Fund Bill, which has been reintroduced into Parliament after it was struck down earlier in the year.
Labor has remained open to the discussion but generally opposes rental freezes and instead has focused on increasing housing supply. Prime Minister Anthony Albanese has previously threatened a double dissolution election if the bill is rejected for a second time.
While the Greens have called rent freezes “life-changing” for renters who have battled rising inflation and prices, Pressley disagreed, calling it a short-term solution that would eventually reduce supply.
“They are quick to point out that a tenant’s rent has increased by $100 per week or $5,200 last year. But they conveniently neglect to mention that the landlord’s expenses increased by $20,000 over the same period,” Pressley said.
“And this is on top of those same landlords also being bashed multiple times over the last eight years, which is the cause of today’s dire shortage of rental accommodation.”
Data supports Pressley’s claim. According to CoreLogic data in March, average monthly rental prices jumped by $290 over the past year, but repayments on a $500,000 mortgage rose by more than $800 per month over the same period.
However, the Greens have argued that property investors get tax breaks costing 78 times what Labor proposes to spend on social housing.
“Property investors will get $39 billion this year alone in tax concessions, so it seems only fair that renters get some relief when they’ve just copped the largest quarterly rent increases in 35 years,” Chandler-Mather said.
Pressley said the argument pits renters against landlords and penalises investors for building wealth that has been done for generations.
According to CoreLogic and ATO data, nearly 90% of investors own either under two properties and a significant portion earn under $100,000 per year.
Pressley said while renters are doing it tough, he is yet to see anyone else in society have their income restricted.
“Would it be acceptable to freeze the income of public listed companies like banks? Or builders? Doctors and nurses? I highly doubt these political plonkers are working on a policy to freeze their own salary,” Pressley said.
“Punishing those who already supply rental accommodation does nothing to help someone who is now home-sharing, recently separated from their partner or is relocating to pursue employment or lifestyle goals. All it does is create rage and a serious risk [of] making Australia unrecognisable for all the wrong reasons.”
“The only way to return to a balanced rental market is to restore the free market that stood the test of decades so that Australia has enough homes for those who depend on rental accommodation.”
Proponents of the Greens may ask at this point, what’s the answer to this crisis if not rental freezes?
Pressley said implementing initiatives that help people become homeowners, produce more homes, and more home upgrades will ease the pressure on rents and reduce the “significant tension” within society.
He pointed to several policies that could achieve this feat – such as 45-year home loans terms, completely phasing out stamp duty by 2028, evergreen interest-only periods and reduced debt servicing buffers – in a recent article.
“Any policy that discourages Australians to invest in the provision of rental accommodation, is a commitment to diluting the size of the rental pool, to tipping more tenants out of homes, and to forcing newlyweds to move back home with the parents,” Pressley said.
“What will it take for politicians in this country to provide the much-needed increased support of suppliers of rental accommodation?”
