Government dismisses Greens call for two-year rent freeze

The Federal Government has dismissed as unworkable a call by the Greens for a nationwide two-year freeze on rent increases.

The party also wants to see rent increases capped at 2 per cent every 24 months once the two-year suspension lapses to ease pressure on tenants.

In the 12 months to June, rents have soared 9.1 per cent across capital cities and 10.8 per cent in regional areas, CoreLogic data shows.

Greens housing spokesperson Max Chandler-Mather said rents are out of control.

“Millions of Australian renters are struggling to pay the rent,” he said.

“Unless the government wants to see more families sleeping in their cars they need to do their job and act now to stop this crisis boiling over into a national tragedy.”

Labor’s federal Treasurer Jim Chalmers acknowledged that skyrocketing rents were a major problem but said the government would focus on boosting supply to combat the housing crisis.

"That’s why we have the Housing Australia Future Fund that’s building more affordable homes, and I’m working with the super industry and the states to see if we can build more stock," he said on Thursday (25 August).

Tepid response

Prime Minister Anthony Albanese was unsure how a national rental freeze would work in practice.

“It’s not clear to me, short of nationalising property, how that could be achieved,” he said.

The Real Estate Institute of Australia (REIA) President, Mr Hayden Groves said the Greens’ proposal lacks a fundamental understanding on the key issues that will help Australian renters.

Mr Groves said that while the plan was well-intentioned it will do nothing for Australia’s long term housing supply crunch.

“The real estate industry, particularly, property managers and owners have implemented the rental eviction moratorium during the past two years of the COVID-19 pandemic.

“At the same time, rent has increased in areas where there is a chronic shortage of supply and unless this is addressed, the situation will worsen.

“Dealing with supply in a real way over farfetched and unrealistic proposals about a national rent control will alleviate pressures on renters.

“Australia’s State and Federal Governments need to focus on encouraging supply and investment in private property markets, as without more houses and more investors supply issues will continue to worsen,” Mr Groves said.

Mr Groves has urged tenants to communicate directly with their property manager if they have concerns about meeting their rent commitments.

Rent control policies like the one proposed by the Greens can have the unintended consequence of restricting the supply of new housing, economists say. 

Independent economist Saul Eslake said the Greens’ proposals would likely discourage investment in new rental housing because would-be investors would turn to other kinds of investments if they were no longer able to make solid returns in the rental market.

Economist for the Grattan Institute Brendan Coates told media that the priority really should be raising the rate of rent assistance by at least 40 per cent.

“That would cost about $1.5 billion today each and every year and also the Commonwealth, the government should be pushing the states to reform land use planning rules that allow more housing to be built.

“Because we know that planning rules make it very difficult for developers and people to build more housing in the middle ring suburbs of their major cities.”

The Greens also proposed an end to no-grounds evictions, which allow landlords to evict tenants without providing a reason if they are no longer covered by a fixed-term lease, and minimum standards for rental properties.