National focus on rent issue

Opinion Editorial published in the Herald Sun on 19 May 2023
By Quentin Kilian, CEO Real Estate Institute of Victoria

Commonsense prevailed in Parliament this week when a Greens motion for a rental inquiry and ‘rental control’ was voted down.

Notwithstanding the fact that the challenges for renters are very real and urgent, an inquiry later this year would be blunt instrument that only kicks the can down the road.

The single and best solution for the state’s current so called ‘rental crisis’ is to increase housing supply. Now.

No amount of rental regulations and enforcements will move the needle, in fact they will only drive the mum and dad investors who currently offer housing (rental providers) out of the market and dissuade new investors from considering property as an investment option.

The idea of running another inquiry pushes out the urgency of working on solutions that address the housing availability issues immediately.

That said, time would be well spent on a fundamental and forensic review of the Residential Tenancies Act (RTA).

Since its introduction two years ago, the RTA has only seen rental providers give in to its onerous legislation and sell-up. We do not need an inquiry to tell us what the problems are here – we already know them – what we need is action on providing solutions with broader, bigger-picture thinking and incentive-based policy.

True to the adage of never wasting a crisis, governments (Federal, State and Local), the property sector, and other stakeholders have opportunity to lean into some large-scale structural thinking and reform, such as the notion of institutional ownership of residential property and the mobilising of private capital across the sector.

Given an appropriate taxation framework – yet another area that requires review in this sector – institutional investors are likely to see the returns of entering an asset class currently dominated by single-house-owning small-scale investors, otherwise known as mum and dads.

To date, changes to the property sector have focused on tinkering with tax policy, or providing grants here and there. Tax is a burden on every participant in the sector and grants don’t touch the sides.

The REIV is encouraging a national conversation on property, where engagement with sector experts meets the desires of governments and the needs of Australians, and takes into consideration the broader economic context of today, and tomorrow.

By working together, property sector leaders and policymakers should be able to find solutions that benefit everyone, and help ensure that all Victorians have access to safe, affordable housing.

Ill-considered ideas such as rent controls or freezes just don’t have a place in the conversation, as was thankfully determined in Spring Street this week.

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