It is widely recognised that insufficient supply of housing is the main cause of rising rents. It’s a simple supply and demand equation; low supply plus high demand equals higher rents. Astonishingly, the main supplier of the rental homes – family investors – are mostly ignored by governments and are actively vilified by the Greens.
Policies that disincentivise the suppliers of rental homes, such as rent caps or rent freezes, end up diminishing the supply and rents continue to rise. With changes to Stage 3 tax cuts heading through parliament, debate around negative gearing and capital gains tax policy settings has been re-kindled with speculation that Labor will go back on another election policy promise and dust off policies they took to the 2016 & 2019 elections. This would be a very bad idea.
In the absence of an alternate plan to deliver affordable rental homes, private unsophisticated investors remain the answer to supply and policy changes that turn them away would make rental affordability far worse.
Here’s a practical ten-point plan to help tenants:
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