The feature on the unaffordability of rentals (July 7) was timely but neglected the real causes of high rentals. Since 1980 to the present the stock of public housing has fallen from around 13,000 units to around 10,000. That added to the present crisis.
The agreement reached when we had self rule foisted upon us was that if the ACT government wanted to sell off public housing they would first of all build replacement public housing. This has not happened. In the nineties both Labor and the Liberal Party were of the mind that if you had too much public housing then unwanted interstate people would be attracted to the ACT.
What they did not count on was that we would have a Labor government abetted by a Liberal one that by restricting the sale of land would push up the price of housing way past what was affordable for those on a basic income. First home buyers are outbid by developers and investors. Affordable housing is still a real prospect but it will not and cannot happen while the land the house is built on is unaffordable. The solution is to revert to selling land over the counter at reasonable prices to people earning around the median income range. We need a decent ACT government to care for its constituency. This means no more light rail and cut back on everything that takes away from affordable housing. In my opinion if Andrew Barr does not show some compassion instead of the spin that is his modus operandi get rid of him next election.
Howard Carew, Isaacs
It's not easy being a landlord
I refer to the great article "Why has renting become so expensive in the Territory" (July 7, p7). The simple answer is landlords and property owners are being excessively taxed by governments and utilities charges.
For example an investor with $500,000 decides to evaluate the Canberra market looking to buy an average property in Lyons for $880,000 (borrowing $380,000 from the bank). He would collect $500 per week in rent but would have to pay out $642 per week (interest on bank loan $365, rates $64, land tax $98, water $20, insurance, property management and repairs $95). That is a weekly loss of $142. When risks include the possibility of higher interest rates, a bad tenant and a bureaucracy that would allow tenants to depreciate the asset. This investor would turn his back on Canberra and look elsewhere and leave a small pool of rental properties for others to fight over.
V Walker, Yarralumla
I read with interest all the articles on July 7 on the rental crisis in Canberra. None of the articles mentioned the huge impact of the ever increasing rates and land tax.
My husband and I saved from our income over many years and managed to purchase a number of properties in the ACT to give us an income when retired. We have been considering selling them and repurchasing in one of the states. Our only reasoning is the huge impact that the rises in rates and land tax imposed by the ACT government have had on our income. I believe many investors have already sold their properties because of these high rates and tax and this has delivered a large decrease in the supply of rentals available, hence the rental increases.
If the ACT government places more financial burdens on landlords, more will sell and rents will increase further. All governments should realise they cannot supply sufficient public housing for the demands place upon them and the balance comes from private landlords, of whom most are not wealthy.
Pamela Wilkinson, Nicholls
Ignoring one main reason
The editorial and article on Canberra's high rent (July 7) ignores one of the major reasons why our rents are among the highest in the country. The excessive increase in rates, together with excessive land tax, means that some rental properties have combined costs in the order of nearly $10,000 per year of which $6000 is land tax. Such costs have to be charged to the tenant as well as recouping other charges such as water supply, insurance, mortgage payments and repairs and maintenance. Home owners living in their own homes do not pay land tax. Land tax is effectively a tax on tenants which is not charged to owner occupying Canberrans. The ACT government, when agreeing to the recommendations of the 2012 tax review, agreed to abolish land tax in its current form. Why are we still charged this tax, which where possible, is passed on to tenants who are least able to pay.
Gina Pinkas, Aranda
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