If, as is widely expected, the Reserve Bank moves to raise interest rates yet again on Tuesday the increase will quickly flow through to the rental market.
Subscribe now for unlimited access.
or signup to continue reading
With many landlords already quitting the sector due to high interest rates, and others jacking rents up to record levels as a result of them, people looking for homes to rent are going to be hit both coming and going.
If there are fewer rental properties out there the competition to obtain a lease will become even more intense. And, for those fortunate enough to find a home, the rent will be high.
This is why it is so important for the Albanese government to take immediate action to increase the national stock of social and affordable housing; an area that has suffered from a serious lack of investment by all levels of government for decades.
While it is true each generation has its own coming-of-age narrative about how hard it was to buy that first home, few would disagree that conditions right now are as bad, if not worse, as they have ever been.
![Treasurer Jim Chalmers. Picture by Sitthixay Ditthavong Treasurer Jim Chalmers. Picture by Sitthixay Ditthavong](/images/transform/v1/crop/frm/LLBstgPA4H8EG9DTTGcXBL/74fd7a11-23aa-4ee2-9b58-59f9767fea7a.jpg/r0_210_4973_3006_w1200_h678_fmax.jpg)
The housing affordability crisis has been compounded by a shortage of rental properties.
While some get bogged down in a debate about whether this is due to a construction downturn during COVID-19, the Airbnb phenomenon or immigration, the reality is that action, not chatter, is needed.
The government, to its credit, is attempting to do something. Last month it took its plan to set up a $10 billion Housing Australia Future Fund to the Senate. The intent is to invest $10 billion into the fund in order to generate revenue to fund social and affordable housing.
According to the government about 30,000 social and affordable homes would be built during the first five years of operation. Of these 20,000 would be reserved for social housing - including 4000 for women and children seeking to escape family violence and for older women facing the risk of homeless. Women over 55 are the fastest growing cohort of the homeless in the country.
The government's plan to make the fund relatively cost neutral in that it will only be able to draw down up to $500 million in income in any given year acknowledges the dire financial circumstances it inherited on coming to office. It has had to cut its suit from the available cloth.
READ MORE:
The fund, unfortunately for those looking for a ray of sunshine in their battle to find a home, is in limbo due to an alliance between the Coalition and the Greens who blocked it in the Senate.
The Coalition, on the one hand, won't support the fund because it believes it is extravagant and inflationary. The Greens, on the other, say it doesn't go far enough and is dependent on investment income.
Their latest ambit claim, articulated by housing spokesman Max Chandler-Mather on the weekend, is for the government to increase the annual spend to $2.5 billion a year and to give the states and territories a $1 billion annual incentive to impose rent freezes.
This is $3.5 billion a year the government just doesn't have. If it was to accede to the Greens demands it would either have to increase taxes or cut spending in other areas.
Given the government has repeatedly said it won't do either of those things, the impasse seems set to continue when Parliament resumes later this month.
That is very bad news for those already couch surfing or sleeping rough - and the many more who are soon expected to join them.
Something is better than nothing. If either the Greens or the LNP truly care about the housing crisis they should pass this bill.
Send us a letter to the editor
- Letters to the editor should be kept to 250 or fewer words. To the Point letters should not exceed 50 words. Reference to The Canberra Times reports should include a date and page number. Provide a phone number and address (only your suburb will be published). Responsibility for election comment is taken by John-Paul Moloney of 121 Marcus Clarke Street, Canberra. Published by Federal Capital Press of Australia Pty Ltd.