- Increased migration is among the factors that will place extreme pressure eon the rental market next year
- The state government needs to work with all stakeholders - tenants, investors and the wider industry - said Tim McKibbin of REINSW
- Fast tracking new housing stock in well-serviced areas the key to boosting supply
The rental crisis won’t be solved anytime soon, in fact it is set to get worse.
2023 will place extreme pressure on the rental market thanks to increased immigration, natural population growth and the fallout from this year’s floods widening the gap between demand and supply.
Tim McKibbin, Chief Executive Officer of the Real Estate Institute of New South Wales (REINSW), said that a healthy rental market is in everyone’s best interests – tenants, landlords, the wider real estate industry and the state government.
“We know the challenges tenants face in the current climate. We know there’s insufficient supply and landlords are exiting the market. Rents are spiking and some people are being forced to turn to crisis accommodation or worse, to the streets,” he said.
“With a new year comes a new opportunity for Government to work with industry on a coordinated response. Politically-driven measures which target agents and landlords have not helped tenants.”
“Policies which are periodically floated such as the end of fixed term leases and rent freezes, as well as the relentless anti-landlord media campaign, ignore the reality faced by landlords: the repayments on their investment, which for many is their retirement income, have become too arduous in the wake of all the interest rate increases.”
Tim McKibbin, REINSW CEO
Mr McKibbin said that ultimately the state government needs to acknowledge the root cause of the rental crisis – the lack of homes for people to rent – then to solve it by committing to work with industry on a coordinated range of measures.
The REINSW has proposed five measures that will assist in repairing the rental market:
Five ways to repair the NSW rental market
- Fast-track supply of new housing in areas well-serviced by both transport and amenity;
- Ensure local councils fulfil their obligations to provide housing for people through the adoption of appropriate housing targets, and make them accountable;
- Implement taxation reform which abolishes or at least drastically reduces property taxation, as the current system including stamp duty, the property tax and other fees and levies is discouraging investment;
- Respect that landlords have the right to control how their investment is managed by protecting their right to negotiate fixed-term leases with tenants; and
- Foster an environment of respect among all stakeholders and cease the anti-landlord media campaign, as the rental crisis won’t be addressed by fuelling conflict between landlords, tenants and agents.
“A healthy rental market is an environment in which tenants have choice, landlords have their rights and security protected, investors are encouraged to invest in residential property and make homes available to tenants, and developers have the confidence to proceed with new projects,” Mr McKibbin said.
However, he believes that none of the characrticis of a healthy rental market are present.
“As a result, we’re seeing some investment property owners turn to the short-term accommodation market or simply sell up in favour of other investments, as the weight of regulation forces them to seek other options to meet their income and repayment needs.
“About a third of Australians rent and of those, around 90% are in rental accommodation provided by private landlords. The importance to encourage, not disincentivise, investors has never been greater,” he concluded.
