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Day after day, the calls don’t stop coming in to Tenants Advice services as renters face rent increases alongside the difficulty in finding and keeping a home that lets them live safe, healthy and dignified lives. Advocates across the state are telling me weekly how difficult it is to help everyone who needs it. Calls about rent increases have increased from hundreds each year to thousands. The TikToks and Facebook threads aren’t stopping either.
It’s clear that Australia has a problem with how we provide homes and the prices we are forced to pay. Far from this just being a city problem or a Sydney problem, many of those hardest hit are regional areas facing new rent increases of more than 35% in the last 12 months amid the national vacancy rate staying below 1.5% for an unprecedented 12 months.
We are in a crisis. Raising the price of essentials in a crisis is generally frowned upon and even unlawful – apparently except in renting where the exact same house costing thousands of dollars more is increasingly normal. Deciding when something is price gouging is a fine line, but for something so essential as a roof over your head, we should err on the side of caution.
While new rents have been skyrocketing the rents component of the consumer prices index, which tracks both sitting and new rents, had been lagging – but the catch-up appears to be coming. Landlords increasing rents are risking causing themselves and owner occupiers even greater interest rate rises and making new supply ever more difficult.
Every state and territory has so far kept no grounds evictions at least in part which continues to throw off the relationship between renters and the people controlling access to this basic human need, and the ability for any reform to have impact. Many renters find themselves in a precarious position in their current home. Moving is a cost itself but now it’s also a massive increase in housing costs. Many are doing what they can to lay low and hope that no rent increase or eviction notice comes.
That can mean not asking for needed repairs like addressing the leaky roof causing mould, or other habitability concerns. The truth is many investors will follow the law and the contract. However, renters learn from experience that asking for compliance is risky behaviour – you don’t know until it’s too late if your landlord or agent will act, ignore you or decide someone else should move in.
What would it look like to act on increasing rents? We need to put fair limits in place. We saw in December parliaments around the country in bipartisan support of coming back from the Christmas break to prevent energy prices rising a few hundred dollars. Across Australia rents have increased thousands of dollars but we have not seen the same concern or urgency to address the problem.
The ACT has a simple model that could be adopted quickly for sitting rents – a threshold limit on rent increases tied to rent CPI. A landlord needs to justify at the tribunal if they want to increase the rent more than 110% of the rent price component of CPI. Currently this system is undone by the continued existence of no grounds evictions. The good news is the ACT government is looking likely to end no grounds evictions at both end of fixed-term and periodic agreements – the two must come together.
Putting the same fair limits on rent pricing at the beginning of tenancies should also be on the table. Just as we all have no choice but to sign up to an energy provider, renters have no choice but to seek shelter – this places extreme pressure on people to accept increased rents or even bid in desperation for a home.
Some claim that reforms intended to ensure homes are stable and affordable would lead to a reduction in the number of homes available to live in. It’s an odd claim in a world where some of the wealthiest and happiest countries have high rates of renting, significant regulation and less shortage of homes than Australia is experiencing. Research shows these claims don’t bear out in Australia either. Overall supply is important but so is what is being supplied – genuinely affordable homes will need to be built.
We need a new conversation about renting in Australia. We need to recognise that renting – shelter – is a basic need and the delivery of it is an essential service. The way we have been delivering this service doesn’t reflect its importance or the ways we ensure other essentials are available to the community. We can bring reasonable, responsible investors along with us.
It is not the invisible hand of the market that signs the rent increase letter – it is a real person asking another real person, with real children, real needs and not much more real income to come up with thousands more to keep a roof over their head. We need all the real people to agree that we can and will make sure rented homes are real homes.
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