Queensland’s property market faces further strain as the government fails to dismiss the possibility of additional rent controls ahead of the upcoming election.
Industry bodies Property Council of Australia Queensland, Real Estate Institute of Queensland (REIQ), and Urban Development Institute of Australia Queensland (UDIA) warned that renewed discussions on rent caps, freezes, and other controls could severely damage investor confidence, further reducing the availability of rental properties.
Jess Caire (pictured above left), executive director of the Property Council’s Queensland branch, stressed the detrimental effects of government intervention in the rental market.
“Any government intervention in the setting of private rents – whether through rent caps, freezes, or controls, whatever name you want to give it – has the same chilling effect on investor confidence,” Caire said.
She added that rent caps are a misguided policy that ultimately pushes investors away, undermining efforts to increase the housing supply.
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Caire highlighted the broader impact of the uncertainty, noting that investors are increasingly considering selling their properties.
“With uncertainty hitting overdrive that the government is once again considering rent capping – despite previously ruling it out – every Queensland investor is googling ‘How to sell your investment property,’” she said.
Caire stressed that fewer investment properties mean fewer rentals available, worsening the crisis for tenants.
REIQ CEO Antonia Mercorella (pictured above centre) voiced deep concerns over rumors that rent caps could become an election promise by the Miles government.
“Just as we are preparing to usher in yet another round of rental law reforms at the end of this month, investors are confronted with the catastrophic prospect of rent caps,” Mercorella said.
She urged the government to avoid policies that could destabilize the rental market and drive investors away.
Mercorella urged the government to act responsibly and reaffirm its commitment against rent controls.
“Investor confidence will be rocked by this rumour mill and so we are calling on the premier to restore calm and confirm that a rent cap and or rent control is not on the cards,” she stated, emphasising the need for stability in the property market.
Kirsty Chessher-Brown (pictured above right), CEO of UDIA Queensland, called for a measured approach to addressing the housing crisis.
Chessher-Brown stressed that the shortage of new homes is already worsening and adding more barriers to investment would only exacerbate the problem.
“Putting up more roadblocks to investment in new homes for renters is not the right approach,” she said. “We need to focus on the things that boost the supply of new homes and investment is central to that.”
Caire said that rent controls have failed both internationally and domestically, citing the ACT’s rental market as an example.
“Not only does it undermine confidence in our ailing housing system, but it is also proven to be failed policy,” she said. “It doesn’t work overseas and all you need to do is look to the ACT to show it doesn’t work here.”
Since the introduction of rent caps in the ACT in 2019, rents have increased by 14%, significantly higher than the national average of 4.6%.
Studies from North America also demonstrated the pitfalls of rent caps.
According to the Brookings Institute, “Rent control appears to help affordability in the short run for current tenants, but in the long-run decreases affordability, fuels gentrification, and creates negative externalities on the surrounding neighbourhood.”
This evidence supports industry warnings that rent controls could have long-lasting negative impacts on the Queensland rental market.
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