Op-Ed: The problem and solution to the rental crisis.
Kevin Young, founder of Property Club says the only solution to resolving the rental crisis quickly is for the Federal Government to immediately reverse two policy decisions that are crippling the private sector rental marke
An additional $44 billion per year is being imposed on renters throughout Australia due to a government engineered rental crisis according to Kevin Young, President of Property Club, Australia’s largest independent property investment group.
Mr Young said that over the last decade the median weekly rent collectively being paid by renters throughout Australia has doubled from around $44 billion to $88 billion per year.
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“A decade ago, the median weekly rent for an Australian home was $300 and now it has blown out to over $600 per week. With nearly 3 million private rental properties throughout Australia, it means that Australian renters are paying nearly $250 million in rent every day.
“Full time adult average weekly earnings have only increased during the past ten years by 30 per cent to $1953 during the last decade meaning rents have increased at more than three times the level of wage growth.
“It is no wonder that the rental crisis in Australia is now financially crippling millions of low and middle-income renters as they battle to pay rents on top of other cost of living pressures.
“This crisis is set to worsen with a huge influx of migrants to Australia. The latest figures show that net overseas long term and permanent arrivals to Australia during January 2024 stood at 55,330 which was the highest January intake ever recorded.
The solution?
“The only solution to resolving the rental crisis quickly is for the Federal Government to immediately reverse two policy decisions that are crippling the private sector rental market.
“Property Club is calling on the Federal Government to reinstate depreciation benefits associated with owning second-hand properties that were abolished in 2017. The abolition of these depreciation benefits resulted in many property investors not buying cheaper second-hand rental properties that could now be offered to renters crying out for affordable rental properties.
“New expensive housing supply with expensive rents cannot help people in tents, couch surfing, sharing overcrowded and sleeping in cars.
“This bad policy needs to be changed to bring back cheaper rental properties. The Federal Labor Government should follow the lead of the Keating Labor Government who abolished negative gearing in 1985 only to reverse the decision in 1987 because it was pushing up the cost of rents.
“We are also calling on the Federal Government to reinstate interest-only lending without time limits for property investors.
“This equally short-sighted policy decision by the Australian Prudential Regulation Authority to impose time limits on interest-only loans from December 2014 resulted in thousands of mum and dad property investors to selling their rental properties because they could not afford principal and interest loans after being forced to switch from interest-only repayments.”
Mr Young warned that without action, rental prices will continue to surge upwards, driving thousands of Australians into homelessness.
“Without immediate action to reverse these two bad government policy decisions, the rental crisis will quickly escalate into a national homelessness crisis.” he said.
About Kevin Young
Kevin Young, founder of Property Club, a property expert with 180 properties. Kevin’s passion for real estate inspires others to pursue success. As a sought-after expert, he has been interviewed on all major television stations and ABC Radio, sharing his wisdom and empowering aspiring investors.
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