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
Unbelievable!!! Its Labor.. yes, it’s believable!!!
Pete, Albanese is too dumb to do the math.
And I don’t think I have ever called a PM of Australia “Creepy”. But this jerk, to come out with an admission of an “error” after 6 weeks, doing that pod cast with an influencer, and to make out that the Japanese PM gave him two melons which suggested two women breasts!!!
OMG, what planet is this guy on? 😡
No wonder we are in a mess and things are not getting any better for the economy overall.
😢
And the really big mistake was to drag pre 20 Sept 1985 assets into the Capital Gains Tax net, requiring a 30 June 2027 valuation and gains beyond this caught under the indexation model. No government has ever had the audacity to retrospectively include these assets and then claim the tax was prospective! Well, the inclusion of a long held, previously exempt asset sounds pretty retrospective to me.
When it comes to residential property, good landlords look after good tenants and long term, mutually beneficial relationships develop. My spouse has a unit bought in 1983, well before the Keating CGT regime. The same tenant has been there for 31 years on a below market rent! If that’s not supplying housing for someone I don’t know what is! Albo and Co simply refuse to recognise these relationships, continue to spend like drunken sailors, and, like heat seeking missiles, come looking to raid super and previously exempt capital gains! So much for incentivising people to provide for themselves!
I suppose doing the exact opposite to what Jim did in the budget…just might have worked
to fix housing.
ie. give investors increased tax benefits
change CGT and negative gearing to entice MORE private investment
..something that Donald might have done ?
“ 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%.”.
That’s a long way from the claims going around on the front page of newspapers. a a calculation of the rent an investor would want to preserve a particular return after losing a tax concession is meaningless. It’s just as sensible as saying landlords want 50% so rents will rise by 100s of dollars.
And Ray White is hardly a disinterested observer: its business depends heavily on property transactions, landlords and investors. So what if Landlords decree a 30% increase because their spreadsheet says they need it. When did you stop believing in market forces setting prices?
It’s not an incentive to new builds because a sensible investor knows they will lose on resale to a market buyer who does not get the incentives passed onto them on second hand purchase.
Peter, you are still on that horse, whipping it to death to blame the last Budget for almost anything to do with housing. Yet the seeds for the disaster Jim and Albo are trying to fix has been sawn 20+ years ago by your conservative mates.
Just to make sure I was on the right track, I asked AI to help me and I asked:” Is the last Australian Budget responsible for increasing rent?”. And the answer was: “No, it basically had nothing to do with it. Stock shortages, which new policies are designed to improve, remain the main reason for rent increases”.
I find it quite farcical that senior government ministers trumpetd a meagre $2 rent rise impact due to budget measures based on economic modelling. What a load of nonsense!
Modelling is simplified process that attempts to predict an outcome. As such it is based on a set of assumptions and provides a range of outcomes with corresponding statistical probability attached to each outcome value. Bureaucrats were likely pressured to report a result that appeased their masters, notwithstanding the probability of achieving that outcome being so meagre as to be irrelevant.
This once again illustrates the disdain with which Albanese, Chalmers and others in government are prepared to treat the community. An insult to everybody’s intelligence.