Qld government rental cap proposal shows ‘no grasp on economics’: REIQ

According to the document, entitled A Blueprint to Tackle Queensland’s Housing Crisis, “There are approximately 150,000 households across Queensland whose needs for affordable housing are currently unmet.”

The Labor leader declared to the media on Monday that her government is “looking very seriously at how a rental cap can be put in place,” in the state with more renters (30.8 per cent) than the national average (27.8 per cent).

According to the QCOSS report, rental growth in the Sunshine state outpaces that of any other Australian state or territory, a statement ratified by data from CoreLogic outlining that Brisbane experienced the largest annual rent growth for both units (13.4 per cent) and houses (13 per cent) last year.

QCOSS’ research found the sharpest increases in private rents were experienced in the state’s regional markets, led by rents soaring 80 per cent in Gladstone over the past five years, followed by 51 per cent in Noosa, and 33 per cent in the Gold Coast.

“I understand this is a big issue for families; they are constantly being faced with huge increases in rent,” the Premier said. Adding that “there has also been around nine interest rate increases. That is really adding to people’s stress.”

Further adding to the financial woes of Queensland tenants, the report found rent inflation at the lower end of the property market exceeded that in the middle of the market, with the proportion of private tenancies being let at rents affordable to low-income households halved from 26 per cent to 13 per cent from 2017 to 2018.

In introducing a potential rent freeze into Queensland parliament last year, Queensland Greens member for South Brisbane, Amy McMahon, proposed “rental increases to be capped at no greater than 2 per cent every two years.” However, no information has been released to suggest a similar figure will be floated by the state government next week.

Alarmingly for the Sunshine state, persistently increasing rents across the last few years has coincided with a 22 per cent jump in homelessness since 2017, nearly 10 per cent greater than the 8 per cent reported across Australia.

According to the state’s Residential Tenancies Authority (RTA), “rent cannot be increased during a fixed term unless it is stated in the tenancy agreement and all of the following occur:

- The agreement states the rent will be increased

- The agreement states the new amount (or how it will be worked out)

- The property manager/owner gives the tenant at least two months written notice

- It has been at least six months since the tenancy started or since the last increase”

Antonia Mercorella, chief executive officer at the Real Estate Institute of Queensland (REIQ), stated the government’s announcement highlights that it’s “seemingly [got] no grasp on basic economics.”

She outlined, “It’s not only the property industry calling this out; several leading economists in Australia agree that rent control is not the solution.”

“In the middle of a housing crisis caused by lack of housing supply, it’s beyond belief that the government is now proposing a measure which innately discourages further supply.”

Ms Mercorella acknowledged that “there is an immense amount of pressure for the most vulnerable in our community,” but adamantly declared that “rent control or freezes are not the answer.”

Citing the position of the community support and services committee chair, Ms Corrine McMillan, “Rent control would not alleviate the key underlying cause of Queensland’s high rent prices - supply.”

She detailed studies provided by the chair which illuminate the fact that “rent controls are not effective in improving housing affordability for renters,” adding such a practice can “lead to distortions in the rental market, which result in poor outcomes for tenants.”

“Entertaining rent control is incredibly dangerous for the stability of Queensland’s property market as investors are the ones doing most of the heavy lifting when it comes to housing the Queenslanders who rent their homes.”

“We implore the government to retract these left-field remarks, which have damaging consequences,” she concluded.