The Australian talked to OpenCorp’s CEO Cam McLellan, who manages 2,500 properties across Perth, Brisbane and Melbourne. He says rents have been rising noticeably since Anthony Albanese won office. And since the Budget’s tax changes, they have spiked even further.
“It’s pretty basic math isn’t it?” he told The Australian. “If we’re below 2 per cent vacancy rate in any capital city, you can put rents up.”
McLellan says the rental market was already under pressure before the Budget, with rental inflation outpacing wage growth over the 17 quarters since Labor’s 2022 election win.
What will surprise Labor fans is a pearler of a fact: under Scott Morrison, Malcolm Turnbull and Tony Abbott, wages rose faster than rents. That rather defies what Housing Minister Clare O’Neil has publicly committed to achieving in her role. In her own words: a goal of “making it better to rent”.
McLellan isn’t surprised that trying to fix a housing supply problem with tax slugs only resulted in higher rents. Some members of the public might see it as a sensible policy idea, but it doesn’t build more houses, and only more houses will effectively cut rents.
The Government is set to face pressure from Opposition housing shadow minister Andrew Bragg and the Greens ahead of a Senate inquiry into social housing, one that will shine an uncomfortable light on Labor’s housing record.
This isn’t a political message. It’s an economic one. And the rent scoreboard proves the point.
Opposition leader Angus Taylor got it right when he told The Australian: “Labor has completely failed on housing, under Labor, rents have raced ahead of wages, and that means Aussies are working harder just to keep a roof over their heads.”
Meanwhile, Labor heads look like they remain in the sand. “Labor is building more homes, strengthening renters’ rights and helping more renters become homeowners,” Clare O’Neil told The Australian. “That’s the best way to put downward pressure on rents over time”.
Ms O’Neil and the Treasurer have stood by Treasury modelling that rents would rise by only $2 a week as a result of the tax changes. Someone should tell Jim and Clare that Treasury modelling looks good on paper but can be way out wrong in the real world of Cam McLellan and renters doing it tough.
Ray White numbers show that in some marginal Labor seats, rents have risen between $4,000 and $6,500 a year. In Teal electorates in Sydney, the weekly rent rise has gone up by around $100.
Rents and property prices will be the key battleground for the 2028 election, and that will give those Treasury “forecasts” on rent increases a chance to be proved right or wrong.
I know what I’d put my money on.
Ray White figures show that if property investors buy an existing property, to make it work mathematically, with no negative gearing tax deduction available, rents would have to rise by 30%. “Doh!”
Albanese doesn’t care. He will just continue to lie and deny