This week, the Greens proposed a new housing policy that would introduce a national watchdog with the power to prosecute property owners who breach proposed new tenancy laws. Rent control remains high on the Greens’ political agenda who want penalties imposed for landlords who put rents up by more than two percent over two years, or who lease properties with undersized kitchens or bathrooms. The Greens also want a two-year rent freeze, tenants to have a presumed right for five-year leases and prohibit landlords from not renewing leases should they wish to sell.
In further landlord-hating parlance, the Greens would fine landlords up to $15,650 and their agents $78,250 for breaches of their new suite of tenancy laws overseen by their new tenancy watchdog. Greens housing spokesman, Max Chandler-Mather reckons “landlords never do basic repairs” and that tenants are “powerless in their own home.” This is just garbage and from a bloke who took to the stage last week defending the unscrupulous actions of some leaders of the CFMEU.
This latest ‘thought-bubble’ housing policy from the federal Greens has zero credibility, is designed to shock the electorate, drive division between tenants and landlords and
fails the pub test – even in Fitzroy street
Last time I looked, it is the private investor market that supplies 9 in 10 rental homes in the nation. It seems obvious that if you disincentivise private investors (with things like rent cap / freezes) investors will stop providing enough houses for renters. This leads to shorter supply (investors will sell) which pushes rents even higher. Yet, somehow, the Greens and have missed this fundamental economic point.
Other Greens’ policies such as calling for changes to negative gearing and capital gains tax discounts seek to demolish the current rental housing system, causing a rental crisis far worse than currently experienced. The Greens say they want solutions to address the rental crisis ‘right now’. Well, you don’t and simply can’t solve it by turning on the very people that supply the houses; you can’t magic more housing supply out of thin air if all your policies are designed to whack investors.
To get more supply in the market immediately, you could start with stamp duty reform. Imagine offering a stamp duty rebate for investors that offered property at a below-market rent that guaranteed a certain reasonable return with fixed moderate annual rent increases. Investors would buy and re-supply the market.
Treasurer Jim Chalmers is on the record as a supporter of reforming stamp duty; that unfair tax that stifles economic growth and impacts affordability. Everyone from the Henry Tax Review through to the National Housing Finance and Investment Corporation (NHFIC) agree with what real estate agents have always known; that stamp duty is a significant barrier to property ownership and rental affordability and is a transaction-killing tax that should be reformed.
There is no avoiding that the only way to address rental affordability is by increasing supply and unhelpful policies that seek to diminish supply rather than incentivise it is counter-intuitive madness.
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