Tuesday 16 May 2023
Greens inquiry into rent capping does more harm than good
Victoria and the rest of the nation is currently experiencing a dire housing affordability crisis that is having serious consequences for many of the most vulnerable in our communities. While immediate action is necessary, we must ensure that proposed solutions are well considered and do not inadvertently make the situation worse – which is exactly what rental controls, or ‘rental capping’ would do.
The Greens’ push for an inquiry into rent capping does nothing to find feasible solutions to the problem facing Victoria. Rental caps would reduce investment in the market – the same shrinking market where completions will be so much lower than the 2018 peak due to poor state planning and populist overseas investor surcharges.
Victorian Executive Director of the Property Council Cath Evans said that this affordability crisis was fundamentally driven by a shortage of new residential stock – not by landlords charging unfair rents.
“The idea of rent capping as a solution to rental affordability has been thoroughly debunked and is a completely counterproductive policy option that will disincentivise investment and reduce the supply of rental accommodation – putting upwards pressure on rents,” said Ms Evans.
“The vast majority of rental accommodation is provided by the private rental market. These are mum and dad investors who are already struggling to reconcile increased land tax bills with the income they receive from tenants,”
“When faced with the prospect of rent caps, many private investors will be highly incentivised to exit the market, pulling desperately needed rental supply from and already stressed market,”
“Issues of supply in Victoria are predominantly driven by delays and inefficiencies in our planning system. Inquiries into rent capping pushed by the Greens will distract from the broader need to focus on cutting through planning to boost housing supply,” said Ms Evans.
Media contact: Dominic Raff | 0478 819 525 | [email protected]