Australia’s Serious Rental Crisis

The huge policy gap behind Australia’s rent crisis has been revealed – and it’s a much bigger problem than the current economic crisis.

Australia’s worsening rental crisis is more serious than economic pressures, behind rising interest rates and soaring inflation, a prominent property expert has revealed.

Ray Ellis says the crisis will worsen without swift action from state governments on social housing.

Mr Ellis, a former director of the Australian Real Estate Institute and former National Real Estate CEO, warned Australia does not have anywhere near enough homes to accommodate its population, let alone adapt to increased migration in the wake of the Covid-19 pandemic.

He said state governments must urgently take responsibility for the immediate need for more social housing to relieve pressure on the private sector.

“From 1955 to 1964, state governments built about 140,000 units of public housing. We have never built that number again,” Mr. Ellis said.

“There are already government incentives for landlords to become property owners and rent properties, and that is the mainstay of every policy from the government.

“Social housing has become the responsibility of the private sector.” Delays to new developments are hindered largely by “corruption” so it takes several years before construction can begin.

“Over the past 25 years, the provision of new land to build more homes by private developers has been very slow and very cumbersome,” Mr. Ellis said. It will take two years to go from concept to start of construction.”

It is only mired in corruption through inaction or slowness to act.

Slow development and underfunded and under-resourced social housing are the main causes of the crisis, Mr Ellis said, along with changing attitudes among landlords.

He observed landlords becoming frustrated by the new regulations imposed on tenants and the enormous pressure to collect rents so low that they barely covered their costs.

“Landlords want nothing more than a good tenant, so they will offer reasonable rents and services and comply with government laws, but they have no responsibility to reduce the rent below their income,” he said.

Many landlords have become completely unwilling to maintain rental properties and have offloaded them as a result, often to investors who want to make as much profit as possible by using them as “false homes” such as Airbnbs.

“This is a real crisis. It doesn’t matter where you are in Australia, there’s no rental stock available, migration continues, it’s going to get worse.”

“Australia just doesn’t build enough houses for us to live in, let alone rent,” Mr. Ellis said.