The housing industry peak bodies, Property Council of Australia Queensland, Real Estate Institute of Queensland (REIQ), and Urban Development Institute of Australia Queensland (UDIA) have expressed alarm that the notion that rent controls are back on the table, saying it will reduce the number of houses available for rent by further undermining the confidence of investors.
They argue that without a clear commitment to rule out all forms of rent control – including rent caps, rent freezes and other government intervention in the private rental market – the uncertainty will continue to send shockwaves through the investment community, exacerbating the current housing crisis.
Property Council’s Queensland Executive Director Jess Caire said rental caps and further rent controls are a race to the bottom for housing affordability and deter new housing supply.
“Any government intervention in the setting of private rents-whether through rent caps, freezes, or controls, whatever name you want to give it-has the same chilling effect on investor confidence,” Ms Caire said.
“Simply put rent caps don’t work – its ideological and gives people the impression it will support affordability but in reality, all it does is send investment packing – the very investment we need to bring new homes to market.”
“With uncertainty hitting overdrive that the Government is once again considering rent capping – despite previously ruling it out – every Queensland investor is googling ‘How to sell your investment property.
“Every investment property sold is one less in the rental market and Queensland investors and tenants are the ones who suffer.
“The vast majority of rental supply is provided by the private market, a market already under pressure – rental caps would only reduce investment in that market.
Real Estate Institute of Queensland’s CEO Antonia Mercorella said she was deeply concerned by reports rental caps could be an eleventh-hour election play by the Miles Government.
“Just as we are preparing to usher in yet another round of rental law reforms at the end of this month, investors are confronted with the catastrophic prospect of rent caps,” Ms Mercorella said.
“Despite being the major supplier of rental housing in Queensland, investors have repeatedly been treated with contempt and used as a scapegoat for the current housing crisis.
“If rent caps – or another form of rent control – were to become a reality, not only would it signal broken promises and a major backflip from the Miles Government, but it would be the last straw for many investors who had endured a legislative onslaught over the last four years.”
Ms Mercorella urged the Miles government to act in an economically responsible manner.
“The government has previously conceded the material risks associated with rental caps and playing this card in the current rental environment would not just be foolish, it’s extremely dangerous,” she said.
“Investor confidence will be rocked by this rumour mill and so we are calling on the Premier to restore calm and confirm that a rent cap and or rent control is not on the cards.”
UDIA Queensland CEO Kirsty Chessher-Brown said the Institute’s consistent message to government throughout the housing crisis has been a call for calm, consistency and considered responses.
“Our research shows the shortage of homes will continue to worsen in Queensland, as there is already no way our industry can meet government’s new homes targets,” Ms Chessher-Brown said.
That’s a big problem for renters as it is the new homes shortage that drive rent increases, she said.
“Putting up more roadblocks to investment in new homes for renters is not the right approach. We need to focus on the things that boost the supply of new homes and investment is central to that.”
Property Council’s Queensland Executive Director Jess Caire said you don’t need to look far for proof that rent caps are and ill-conceived policy.
“Not only does it undermine confidence in our ailing housing system, but it is also proven to be failed policy. It doesn’t work overseas and all you need to do is look to the ACT to show it doesn’t work here – they have some of the most prohibitively high rental markets in the country,” Ms Caire said.
In the ACT, the only Australian market with a form of rent cap, rents have increased by 14 per cent since the laws came into effect in 2019, which is significantly higher than the national average of 4.6 per cent.
Internationally where rent capping has been introduced, it again shows it is poor policy – in North America, where supply issues are less acute than Australia, the Brookings Institute tells us:
“Rent control appears to help affordability in the short run for current tenants, but in the long-run decreases affordability, fuels gentrification, and creates negative externalities on the surrounding neighbourhood.” (2018)
