Property News, Insights & Education

    Rent Caps: Not Even Renters Want Them, Survey Finds

    The Property Council’s CEO, Cath Evans, appeared on ABC News this morning, speaking with Chris Gilette about Australia’s desperate housing crisis.

     

    Ms Evans shared some of the latest data to come from the Property Council’s research. 

     

    In a survey of over 1000 Victorian residents, over 73 percent of respondents agreed that rent controls would make finding a property increasingly difficult, and 75 percent felt strongly that housing supply should be the government’s main focus to support rental affordability.

     

    Additionally, 72 percent of respondents voiced concerns that rent caps or freezes would negatively affect the quality of homes for rent, with maintenance becoming somewhat neglected.

     

    Ms Evans said the results come down to a common knowledge among renters that supply and demand largely determine affordability.

     

    “Our Victorian community has a pretty clear understanding of the economic drivers of rental affordability,” said Ms Evans.

     

    “They understand that supply drives the economy. And this view has been well traversed by many qualified economic advisors who have been in the public domain around this issue.

     

    “They have commentated that rent controls may be a short term fix but will do nothing to add to the supply of housing, which clearly will drive rental affordability if more supply is in the market.

     

    “Respondents understand that basic economic principle, and that came through in the polling results.”

     

    REIV launches campaign against rent caps

     

    The topic of rent freezes has been in the hot seat again this week, with the Real Estate Institute of Victoria launching a major advertising campaign appealing against the Green’s proposal.

     

    They claim that rent freezes could result in increased homelessness, and that higher rents are a symptom of limited supply. 

     

    REIV CEO, Quentin Kilian, said that rent freezes are a ‘wreckless’ policy.

     

    “To add another shortsighted, ill-considered condition, such as a rent cap, is just wreckless – it will without doubt increase homelessness as more investors leave the market and could possibly harbour a black market rental sector.”

     

    The peak body is also concerned that existing rental stock could deteriorate in quality if rent caps were introduced, that renters with higher means would hoard affordable housing, and that a black market of sub-letting would emerge.

     

    Grattan Institute says ‘rent freezes do more harm than good’

     

    Adding to the conversation, the Grattan Institute also published an article this week, highlighting that rent caps would do more harm than good.

     

    Authors Brendan Coates and Joey Moloney pointed to international examples of rent freezes gone wrong. The United States has implemented them in select cities, and the effects are deterring to say the least.

     

    “In San Francisco, studies showed the lost rental supply probably just drove up market rents in the long run. In New York, evidence showed rent-controlled units were more likely to be dilapidated,” read the report.

     

    Instead of rent freezes, the authors suggest that the government increase their recent 15 percent boost to rent assistance up to 40 percent. And pass the delayed HAFF bill through the senate.

     

    The irony in the HAFF bill hold up is that, based on the Property Council’s recent survey, it seems that even renters don’t want rent caps. 

     

    They understand the implications rent caps can have on existing and future housing supply. And apparently, more so than Adam Bandt and the Greens party.