Experts weigh in on what a rental price freeze would mean for the region

With the possibility of rental price caps on the table for Queensland, experts have weighed in one what the decision could mean for the Sunshine Coast.

Premier Annastacia Palaszczuk confirmed rent caps were on the agenda for a meeting of government, industry and advocacy groups next week.

However, several industry groups are already calling for the Queensland Government to withdraw its potential policy, agreeing a freeze was not the answer.

It comes as it was recently revealed median rents rose 51 per cent in Noosa over the past five years, while separate data estimated in 2022 alone more than 14,000 Sunshine Coast residents had been displaced due to the rental crisis.

Housing Industry Association (HIA) senior economist Tom Devitt told Sunshine Coast News a solution needed to focus on supply and demand shortages.

Mr Devitt said Queensland needed to build around 40,000 homes per year just to prevent housing affordability from deteriorating further.

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Aura is one of only a few new residential developments on the Coast.

“In (the) Sunshine Coast specifically, around 4000 to 5000 new homes were getting built per year heading into the pandemic, and we forecast that to continue over the next few years.

“But based on the rate of growth of local land and dwelling prices, that doesn’t appear to be fast enough either.”

He said maintaining these numbers would not improve affordability but prevent the crisis from getting worse.

Mr Devitt, who was on the Sunshine Coast last week to discuss the HIA’s economic forecast for 2023, said policy discussions should look at increasing new home builds and addressing rising interest rates.

“The fact the government is considering this (policy) highlights how dire the situation is for people to get in to the homebuying and rental market,” Mr Devitt said.

“(Housing supply) is really the key to addressing current affordability issues.

“The first step to that currently is structural changes to finance to make it easier for banks to lend to homebuyers.

“We then need to look at planning reforms to make it easier to build houses in new areas and existing suburbs where higher density can play a bigger role.”

According to property expert and the drive behind the Homes For Everyone campaign Mal Cayley, the price cap policy would only push more Coast renters from their homes.

“Research shows that at least 160,000 Queenslanders will be tipped out of rentals and into homelessness if this policy comes to fruition,” he said.

“That’s an additional 10,000 Sunshine Coast residents without a home.

“The homes will still exist, they will just be full of owner-occupiers trying to get into this market.

“Those that can’t afford to buy will be sent packing.”

Mr Cayley had previously said there were families of four who could afford $580 per week in rent but had to send their children to school from the car they were living in, because they could not find a house to rent within their budget.

The Real Estate Institute of Queensland (REIQ) has echoed its concerns on the policy.

CEO Antonia Mercorella if it were to go ahead, it would shatter what little confidence was left in the property market, ultimately driving investors away.

“Entertaining rent control is incredibly dangerous for the stability of Queensland’s property market,” she said.

“In the middle of a housing crisis caused by lack of housing supply, … the government is now proposing a measure which innately discourages further supply.

“No one denies that there is an immense amount of pressure for the most vulnerable in our community, but rent control or freezes are not the answer.”

Deputy premier Steven Miles said there was a big difference between freezing rent completely and a potential limit on increases.

“We’ve heard from families who have seen their rents increase 20 (or) 30 per cent, we’ve seen evidence of some property managers price gouging in the market … so we want to have a conversation about what should be done about rents,” he said.

The Liberal National opposition has signalled its objection to any form of rent control.

The best way to increase housing supply was with “stable taxation and regulatory environments” that give investors certainty, treasury spokesman David Janetzki said.

Tenants Queensland CEO Penny Carr has heard stories of renters going to real estate agents months in advance to find out if their lease is being renewed and if they are up for a hike.

She said investors come in and out of the market all the time and decisions tend to centre on long-term gains.

“They’re looking at negative gearing and capital gains reductions, rather than … income on a weekly basis,” she said.

“It is government’s role to regulate markets so that they operate well and if you look at the market now, you’d probably say it’s failed.”

Article source: Queensland Property Investor