The final report from the Senate Inquiry into the escalating rental crisis in Australia has come under harsh criticism from the Property Investment Professionals of Australia (PIPA), which lableled it a “waste of taxpayers’ money.”
Released in early December, the report contained no collective recommendations, drawing condemnation from PIPA Chair Nicola McDougall (pictured above).
“The inquiry was not only a waste of taxpayers’ money but was a huge waste of time and resources for the hundreds of individuals and organisations, such as PIPA, who produced submissions or spoke at the four public hearings,” she said.
While the chair’s recommendation for a two-year retrospective rental freeze and a 2% cap on rental increases every two years was included, McDougall argued that it seemed directly borrowed from The Greens’ playbook, lacking support from the National Cabinet or even Coalition or Labor Senators involved in the inquiry.
The PIPA chair criticised the chair’s suggestion for rental freezes, emphasizing that expert research consistently showed negative consequences for tenants due to reduced rental supply when investors exit the market.
The National Cabinet’s stance, as of August last year, leaned towards a national standard of no more than one rent increase per year for tenants in the same property across fixed and ongoing agreements, differing significantly from the inquiry chair's recommendation.
PIPA’s analysis of ATO data revealed a concerning 55% decline in the net average annual number of people with rental property incomes over the past five years nationally. The reduction in investor activity over the past eight years, particularly in Victoria and Queensland, has contributed to the exacerbation of the current rental crisis, according to McDougall.
Warning against potential anti-investor rental and taxation reforms, she expressed concerns about continued threats of rent freezes at a time when investors are grappling with significantly higher interest rates on their property loans.
“The ATO stats don’t lie, investors have already deserted markets around the nation – and especially in Victoria and Queensland – because they feel like they no longer have control of their assets,” she said.
The 2023 PIPA Annual Investor Sentiment Survey indicated that 12.1% of investors sold one or more rental properties nationally in the 12 months to August last year, with higher percentages in Queensland (39.8%) and Victoria (31.35%).
“Unfortunately, in another sign of more pressure to come for tenants, the survey found 38% of investors feel it’s likely they will sell within the next year for myriad reasons, a staggering increase from the 19.2% in the 2022 annual survey,” McDougall said.
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