Key Points
- The proposal would see wages catch up with rents by the end of the decade.
- It comes as rents across the country soar.
The federal government is not actively considering a rent freeze as proposed by the Greens, Treasurer Jim Chalmers says.
The Greens are calling for a nationwide two-year rent freeze to allow incomes to catch up with surging prices.
The party also wants to see rent increases capped at 2 per cent every 24 months once the two-year suspension lapses.
However, Mr Chalmers recognised skyrocketing rents were a major part of the inflation problem and that employers in regional areas were struggling to attract staff because of a lack of available housing.
Mr Chalmers said the government would focus on boosting supply to combat the housing crisis.
The Australian Greens housing spokesman Max Chandler-Mather. The party wants to see rent increases capped at two per cent every 24 months once the two-year suspension lapses. Source: AAP / Mick Tsikas
Prime Minister Anthony Albanese was unsure how a national rental freeze would work in practice. "It's not clear to me, short of nationalising property, how that could be achieved," he said.
Rent control policies like the one proposed by the Greens can have the unintended consequence of restricting the supply of new housing, economists say.
Independent economist Saul Eslake said the Greens' proposals would likely discourage investment in new rental housing because would-be investors would turn to other kinds of investments if they were no longer able to make solid returns in the rental market.
If rent controls were introduced, he said more properties would likely become available to buy if investors decided to sell, which would reduce demand on the rental market.
"But the probability is that those previously frustrated would-be home buyers who might purchase properties from landlords who choose to exit the market would be more affluent than the majority of renters," Mr Eslake told AAP.
He said increasing the supply of rental housing was the most effective solution to unaffordable rentals and that government investment in social and affordable housing was central to boosting supply.
Real Estate Institute of Australia president Hayden Groves said the Greens' idea was well-intentioned but would do nothing to ease housing supply shortages in the long run.
"The real estate industry, particularly property managers and owners, have implemented the rental eviction moratorium during the past two years of the COVID pandemic," Mr Groves said.
"At the same time, rent has increased in areas where there is a chronic shortage of supply, and unless this is addressed, the situation will worsen."
The Greens also want an end to no-grounds evictions, which would stop landlords evicting tenants without providing a reason outside of fixed-term leases and minimum standards for rental properties.
The party pointed to rental freezes during the pandemic and the use of rental controls around the world to support its proposal.
"Rents are out of control, millions of Australian renters are struggling to pay the rent, and unless the government wants to see more families sleeping in their cars, they need to do their job and act now to stop this crisis boiling over into a national tragedy," Greens housing spokesperson Max Chandler-Mather said.
The proposal would see wages catch up with rents by the end of the decade.
Mr Chandler-Mather said rent control should be considered as part of a holistic strategy to improve housing affordability, with measures such as introducing a vacancy levy, phasing out negative gearing and capital gains exemptions, and building more public and social housing.
