The Greens latest proposal to freeze rents in the ACT would be a “catastrophe” for Canberra renters and families, according to a peak real estate body.
The Real Estate Institute of the Australian Capital Territory (REIACT) Chief Executive Officer Maria Edwards said the latest proposal, tabled by Jo Clay MLA, would have a detrimental impact on the state’s housing market.
Under the plan rents would be frozen for two years and there would be a two per cent limit on rent increases after those two years.
“A rent freeze, followed by an ongoing inflexible rent cap, in the ACT would only exacerbate existing challenges and hinder the overall housing supply,” Ms Edwards said.
“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 said rent freezes create lower vacancy rates and supply, and she questioned the timing of the bill.
“The rental market in Canberra is one of the most affordable in Australia when you take into account the average income of Canberrans,” she said.
“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.
“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.”
When tabling the bill Ms Clay described the Canberran housing market as “cooked”.
“More than 30 per cent of Canberrans rent, and many are struggling to pay the rent week to week,” she said.
“They face terrible uncertainty. Many are worried and they can’t afford to pay.
“For the average Canberran, less than one per cent of rentals on the market are affordable.
“In the current inequality crisis, we must now take the next step and
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,” she said.
“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 Ratenbury was elected to represent.
“Rent freezes are not only bad news for renters, but bad news for Canberra.”