Rapid rental property growth prompts regulation review says report
With the private rental sector growth surpassing all household growth, a new report has suggested that regulations and policies are lagging behind.
The AHURI report, The future of the private rental sector, details how the private rental sector (PRS) has grown by 36 per cent over the last decade and suggests that policy makers should consider the effectiveness of existing settings.
Undertaken by Swinburne University of Technology and UNSW, the research studied the institutions, policies and practices of the private rental sector in Australia and nine other countries.
According to the research, over a quarter of all Aussie households are privately renting and that number is only growing, but by international comparison, Australia has the weakest laws regarding security and rent regulation.
Researcher Dr Sharon Parkinson said places like Germany, which had a similar market had stronger tenants’ rights and Australia’s laws didn’t stack up.
“Australian landlords and regulators should regard provision of rental housing here as a business where standards are important,” Dr Parkinson said.
The research found that privately rented properties debt-based financing had increased significantly and was the highest out of all the countries researched by AHURI.
Dr Parkinson said the Australian sector is unique due to a high integration between houses and flats that transfer between privately-owned and owner-occupied.
Dr Parkinson said that while the private sector shares most of its housing stock with the owner-occupied sector, the PRS is also fragmenting and diversifying particularly at the low end of the market.
“We’re seeing newer markets such as in the student housing sector, new generation boarding houses in NSW, developers retaining units for rent, an affordable rental sector provided by not-for-profit organisations and a growing informal sector,” said Dr Parkinson.
The evidence showed though the investment in rental properties is skewed towards moderate to highly priced rentals with limited and insufficient dwellings accessible at the low rent end.
The research found that the informal sector was growing, and landlords are acting in unscrupulous ways to increase rental returns which are under the policy-makers’ radar.
“Informal housing arrangements like room and short-stays rentals are growing and they are often under policy-makers’ radar unless there are health and safety issues,” Dr Parkinson said.
