Long-suffering renters in Canberra may get relief from the nation's highest rents and tightest vacancy rates when the ACT becomes the first jurisdiction in Australia to bring institutional investment into the rental market.
A lack of housing supply has been blamed for ACT apartment rents rising 25 per cent during the past year to a median of $420 a week.
Head of the ACT Chief Minister's housing affordability taskforce David Dawes said several sites were about to be bundled together in an expressions of interest offering to the market. The Government is looking at establishing 400 houses and units at greenfield locations in Gungahlin and in-fill sites elsewhere in Canberra.
While institutions are still assessing the Federal Government's National Rental Affordability Scheme, which will offer annual subsidies of $8000 a dwelling in tax credits, Mr Dawes said the ACT had been working on its strategy since April last year when it launched a housing affordability action plan.
He said the Commonwealth's initiative was a bonus.
"Things are happening, it's a bit of a moving feast I suppose. It is good that it is on the radar of the Commonwealth and I think it will enhance our package," he said.
"When we go out with expressions of interest we will narrow it down to a couple of the institutions that can do it. These sorts of things may lend themselves to a consortia, to finance, build and manage it."
The Commonwealth set last week a new target of 100,000 rental properties across Australia, and said it would create a new "asset class" because there was little investment from institutional investors in residential property in Australia.
Leighton Properties NSW manager Mark Gray said the Federal Government was going in the right direction, but whether it was enough to achieve the scale of development institutional investors would require remained to be seen.
"There's not enough return. On residential, whether affordable housing or not, is 3 per cent on your money. No institution can afford to address it at that level. There has to be sufficient incentive to drive it.
"Today it is of more interest than it was last week, put it that way."
Stockland's residential business chief executive, Denis Hickey, said the Federal Government's policy recognised the need to create a viable residential asset class in Australia.
Australia was undersupplied with new housing at the rate of about 20,000 dwellings a year, and prices of many new houses and rental accommodation costs were out of reach for a growing part of the population.
"We recognise that there is no silver bullet solution to affordability, as it is a complex issue with a long history."
ACT Council of Social Service director Ara Cresswell said high public-sector incomes had skewed affordability indicators and the ACT's median rent for a three-bedroom home was the highest in Australia.
She said people were suffering from housing stress.
"Some working families are not putting food on the table in order to pay the rent.
"If there's a health crisis or some other crisis, families have to make choices whether to pay the rent."
Mr Dawes said bringing institutions into the market would still leave room for "mum and dad" investors in Canberra's rental sector.
"It's a fine balance, but I really do think when you look at the rental crisis, where people of all ages are queuing up to get into rental [home] exhibitions, it is very unhealthy.
"We really need to tackle it in a bigger scale so hopefully we can get people with a roof over their heads.
"That's the objective of all this. If we don't see eventually the stabilisation and lowering of some of the rents, we haven't achieved what we've set out to do."
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