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MEDIA RELEASE: SHANE RATTENBURY’S NEW PROPOSAL FOR RENT FREEZE BAD NEWS FOR RENTERS AND THE ACT
MEDIA RELEASE – 12 FEBRUARY 2024
Canberra, ACT – The Real Estate Institute of the Australian Capital Territory (REIACT) has responded to Shane Rattenbury’s latest rent freeze proposal as a catastrophe for Canberran renters and families.
REIACT CEO, Ms Maria Edwards said the latest proposal from tabled Jo Clay MLA is bad news for Canberra and would have detrimental effect on the ACT’s housing market.
“A “rent freeze” followed by an ongoing inflexible “rent cap” in the ACT would only exacerbate existing challenges and hinder the overall housing supply.
“We know from lived experience from international markets that rental costs increase when rental freezes and rent caps are introduced. Rent freeze/control has not worked overseas and transfers any cost savings to future renters. This is based on international case studies of lived experience in other OECD nations like Berlin, Dublin and San Francisco.”
Ms Edwards emphasized that rent freeze creates lower vacancy rates and supply. “The timing of the bill presented is curious,” she said.
“The rental market in Canberra is one of the most affordable in Australia when you take into account the average income of Canberrans. Houses have become cheaper to rent over the past 12 months, units have had minimal increases and the vacancy rate in the ACT is the highest of all the capital cities in Australia,” Edwards explained.
“Inflationary pressures appear to be easing and tax cuts aimed at low to medium households are on their way. There are existing measures in place for tenants who are struggling such as the “Rent Relief Fund” which REIACT has actively promoted through its membership multiple times at the request of JACS,” she added.
Ms Edwards said families in Canberra and those working in public service would also suffer under such an arrangement.
“Many of the rentals in the Canberra rental pool are actually defence and foreign affairs personnel. What you are saying effectively is that these hardworking families will be out of pocket and unable to cover mortgage repayments if they choose to take a posting outside of Canberra.
“It wholeheartedly lets down the very people Shane Rattenbury was elected to represent.
“Rent freezes are not only bad news for renters, but bad news for Canberra.”
ENDS
Background notes
The paper presented to the Legislative Assembly by the Greens acknowledge that such a policy would likely cause properties to be sold. When a rental property is offered for sale the preference is for the property to be vacant – and there is no guarantee it will be bought by another investor. This means affected households currently renting will likely need to find alternate accommodation which is not only disruptive and stressful, but also comes at great expense when factoring in moving costs. Instead of creating the “security of tenure” that the Greens aspire, short-sighted policies such as this one can have the exact opposite effect.
Even more concerning, in her explanatory statement, Ms Clay recommends “rent increases should be based on an individual’s ability to pay rent rather than the broader consumer market in which CPI is based”.
This means that a landlord could have no ability to increase the rent at all should their tenant’s financial positioon change (even by choice, such as voluntarily leaving the workforce to study) and with no cause evictions in the ACT, they also have very limited options other than to sell the property. If only all other expenses in life such as food and petrol were tailored to your income.
REIACT strongly urges the Greens Party to reconsider its proposal for a rent freeze and engage in meaningful dialogue with industry stakeholders such as REIACT to develop solutions that address housing affordability without compromising the overall stability and sustainability of the housing market in the ACT.
