It could be at least a year before struggling families benefit from a Federal Government scheme to ease soaring rental costs.
But welfare and housing groups say the scheme is a much-needed step in the right direction to help low-income households which are being ''hammered'' by big rent increases.
The Government officially launched its National Rental Affordability Scheme yesterday. The scheme aims to increase the supply of affordable rental dwellings by 50,000, and possibly 100,000 by 2012.
The properties will be rented out at 20 per cent below market value.
The scheme will offer incentives to developers at a cost of $623 million over four years.
''That is practical action to do with problems of rent which are real and are hurting working households right across the country,'' Prime Minister Kevin Rudd said in Darwin.
Targeting institutional investors such as banks and superannuation funds, the scheme offers investors $8000 a dwelling a year to take part.
Australian Council of Social Service acting chief executive Gregor Macfie said the scheme was a positive step and ''the first large-scale private institutional investment in affordable rental accommodation in this country, so it is welcomed''. Launching the scheme in Sydney with Housing Minister Tanya Plibersek, Treasurer Wayne Swan admitted there was no easy solution to rental housing affordability.
The launch came as a new survey by Australian Property Monitors showed double-digit rent increases in most of the major cities in the past 12 months, including a 25 per cent jump in Perth rental units.
A report by AMP and the National Centre for Social and Economic Modelling showed while pay grew by 31 per cent between 2001 and 2006, the cost of housing surged over the same time by more than 60 per cent.
Housing Industry Association chief economist Harley Dale said, ''If you talk about the next six to 12 months then it's hard to see any turnaround in tight rental conditions, and there is no doubt that is hammering the lower-income rental households the most.
''But if you didn't have policies being implemented like the National Rental Affordability Scheme then those same groups would still be being hammered in two, three, four years time even.''
Ms Plibersek said the Government didn't want living in one of the scheme's homes to become a work disincentive for families.
While the income cut-off for a family with two children was $69,000 for the scheme, once they were in the property they would be able to keep it, even if their income increased to $87,000.
The scheme is part of a range of Government initiatives, including an account which helps people save a deposit for their first home.
Master Builders Australia chief economist Peter Jones said, ''Government subsidies are a requirement to ensure adequate supply of low-cost rental properties.
''This particular scheme to target banks and super funds in an attempt to establish an new asset class is a good idea in principle, although we do need to remember that financial flows of funds go to where there are strong returns or low risks.'' AAP