Federal Housing Minister Julie Collins has insisted rent caps are ineffective for solving the nation’s rental crisis.
Speaking on ABC News Breakfast on Tuesday morning (13 June), she espoused: “Everyone knows the Commonwealth doesn’t have the power to cap rents.”
Even if the government did have the capacity, she stated, “we have data and evidence, it [rent caps] doesn’t work, and it puts downward pressure on supply”.
“What we need to do is add supply,” she asserted.
The national rental crisis is gripping all corners of the national market as increasingly dwindling supply levels sent rents to record highs throughout 2022, according to data from research centre CoreLogic. Following an annual increase of 10.2 per cent across the last calendar year, the firm recently reported the upward trajectory of Australian rents has continued deep into 2023, with over 40 per cent of national rental markets reporting a 10 per cent or more rent increase in the 12 months to May.
With rental conditions unfavourable to tenants, many of whom are doing it tough in light of a myriad of economic conditions, including rising cost-of-living pressures, multiple levels of the Australian Greens Party have called on the introduction of rent freezes to afford tenants across the country some financial breathing space.
Last year, Greens MP Max Chandler-Mather stated: “Just as the government coordinated a national response to the COVID-19 health crisis, the federal government should intervene to coordinate an emergency nationwide response to the housing crisis that includes a rent freeze.”
The member for Griffith believed embarking on such a course of action would “give people the security they need to start getting on with their lives”.
At the time, Mr Chandler-Mather’s comments were slammed by Real Estate Institute of Australia (REIA) president Hayden Groves, who suggested the scheme “will do nothing for Australia’s long-term housing supply crunch”.
Earlier this year, in the build-up to the state’s election, the NSW Greens Party doubled down on calls for a rent freeze given the “cooked” nature of the state’s rental market.
More recently, the federal Greens Party has been in negotiations with the Albanese government related to the $10 billion Housing Australia Future Fund (HAFF), with the Adam Bandt-led party withholding their votes to support passing the HAFF through the Senate because of a perceived lack of significant concessions for their demands in the bill.
As part of the negotiation process between the two parties, the Greens has tabled a new offer to the government asking for $1 billion to be used annually in funding a rent freeze.
Ms Collins’ comments come a week after the latest Greens proposal and share similar sentiments to Mr Groves’ previous criticism of the Greens’ offer.
“We know that rent freezes are bad for rental supply, bad for rental affordability, and bad for renters. We know from lived experiences it will send vacancy rates even lower,” he stated.
Speaking on national television, Ms Collins outlined the government’s focus is on adding supply to ease the rental crisis, with her party exploring this avenue “not just with our Housing Australia Future Fund and our other investments”.
Ms Collins explained a range of measures utilised by the government to increase national housing supply, including “the $1.7 billion this financial year from 1 July that’s going to states and territories to invest in more affordable housing. The National Housing Accord, another $350 million from 1 July 2024 for another 10,000 affordable rental homes that will be matched by states and territories.”
“And of course, this comes on top of the budget measures that we have announced in this year’s budget, which is more tax changes and concessions for build-to-rent, which the sector indicates will be between 150,000 and 250,000 additional rentals because of that decision,” she added.
Mr Groves does believe that any form of rent freeze would “turn the tap off on housing investment” at a time when it is “needed the most”.
Speaking last week, the REIA president expressed thanks to Minister Collins and the Labor government “for continuing to listen to the clear evidence in the face of Adam Bandt’s rental freeze snap”.
