The Property Owners Association of Queensland (POAQ) was pleased to attend and represent the private landlords and property owners at the Queensland Housing Summit today. Private landlords account for around 90% of the Queensland rental supply.
We feel the Summit was a good start at discussing the situation and looking at solutions. It covered the shortage of public and community housing as well as the need to reform planning schemes and addressing challenges to construction. This would lead to facilitating more new homes, higher densities as well as a diversified range of homes. The topic of incentives for property owners to rent properties was only very briefly touched on.
The Treasury figures summarised by the Treasurer Hon Cameron Dick MP show there are now 55,000 fewer rental properties available than in 2020. Figures show at least 20,000 properties that have left the housing market for unknown reasons plus another 14,500 for "repair and renovations". The POAQ believes these are underestimates.
There is ample evidence showing private Landlords are exiting the rental market by selling or re-purposing their rental investments, at the same time others are discouraged from investment in residential rental property. There key reasons landlords have provided include:
1. Ever more onerous and unfair rental laws increasing risk for landlords, favouring unscrupulous tenants and removing the ability of landlords to effectively manage their property. The Housing Legislation Amendment Act 2021 provisions are a prime example.
2. Surging government costs including land tax and council rates, including the controversial but now shelved interstate land tax grab. Any tax which applies to rental investments, but which is either reduced or exempt for owner occupiers, is effectively a tax on tenants. These heavy costs on landlords must invariably get passed on to tenants and therefore now a key factor in the current spike in rental prices.
3. The threat of further and unpredictable government interference such as rent control (rent freezes), taxing vacant properties, forcing landlords to giver indefinite leases, mould standards and so on.
4. Escalating non-government costs such as insurance, interest charges, labour and materials for repairs. We acknowledge some of these are outside of Government control.
The result is a sharp drop in supply of rental homes, in particular affordable rentals needed by the most vulnerable. This is a key cause of the rental crisis we have today.
The recommendations by some stakeholders, which centre around planning to allow more dwellings to be built either on new lots or higher density on existing lots, is only part of the solution. While it does address the housing crisis for owner occupiers, it offers little to solving the crisis of rental supply or affordability. This is because new dwellings built (and existing sales of rental property) will easily be absorbed owner occupiers who are wealthier families with the ability to buy, plus more than 220,000 people expected to migrate to Queensland from interstate or overseas over the next 5 years. Those currently experiencing rental stress and homelessness will be left out in the cold as they cannot buy a home, and there will be no investors prepared to buy and rent to them. The solution to rental supply and affordability is more private investment into rental property, the most effective and efficient way is private landlords.
Schemes such as NRAS (ending soon), 'Build to Rent', Social home clauses, 'Help to Home' and others are either unavailable or too convoluted for investment by private landlords. All social housing schemes by their nature run at a loss so therefore the difference between actual rent and market rent will require a subsidy from taxpayers. Even worse, social home clauses can lead to expenses passed on to other buyers in the development leading to even higher entry prices for others to buy their first home. Only private landlords can provide critical rental supply with little or no cost to taxpayers.
The POAQ is calling for the state government to take immediate action. This includes:
1. An immediate review of residential tenancy laws (RTRA). In particular examining the impact of Housing Legislation Amendment Act 2021 has had on supply. The POAQ believes the provisions (except those relating to Domestic Violence) should be repealed.
2. Tax and rate levy equality for owner occupied and rental homes. Amending the Local Government regulations to prohibit councils levying higher rates for rental properties.
3. The government to clearly and unequivocally rule out some of the proposals that would result in harming the rental property market.
4. Incentives aimed at encouraging property owners to make properties available to rent, particularly affordable rentals. These could include subsidies for older properties to upgrade standards such as security, insulation, efficiency and more.
For more information please contact the POAQ.