There is no doubt in anyone’s mind at the moment that rental properties are in high demand. This is blatantly indicated by the rise in median rents in the state. Rents in QLD have risen about 15% in the last 12 months. Open homes for rental properties have larger attendance than sales open homes and renters are offering more than the asking rent just to be competitive. Ultimately the root of this issue is that the supply of rental properties is too low. There are reports of people raising families in caravans and even tents. This is becoming a legitimate issue for a lot of people, and you can’t simply create new housing at the drop of a hat! So how do you fix it?
Queensland Greens MP Amy MacMahon has tendered a private members bill to the floor of the QLD Parliament just last week. She is proposing an amendment to the Residential Tenancies and Rooming Accommodation Act 2008. The proposal stipulates that for the next 2 years rents be frozen at the price rented for, or advertised for rent, as at August 1st 2022. She claims that the free market approach to rentals has failed a lot of struggling families. While this would prevent further rent increases for the next two years, many in government voiced concerns that this does not get at the heart of the problem. At the end of the day, it puts a pause on price increases, but does quite literally nothing to address the real issue with is the lack of supply. Concerns were voiced saying that this will not encourage people to want to rent out existing properties but sell them instead. This also creates a disincentive for current landlords to keep the property on the rental market if they are able to get better returns elsewhere. It will potentially lead to landlords dumping stock and selling properties or turning to short-term letting like Airbnb in order to maintain the returns they want.
Ultimately this is a complex issue and won’t be solved by a simple pause to rent increases. There needs to be mechanisms introduced that will stimulate the free market to create more rental housing, so that people aren’t being left out in tents and pensioners aren’t skipping meals in order to make ends meet. What would that market mechanism be however? Well, that is a good question! While Amy MacMahon’s proposal doesn’t do much to get to the root of the issue. At least it is being raised and the discourse has started!
