Radical plan to save renters from 30 per cent price hikes
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A proposal to double the standard rental lease in Australia to two years will be tabled in parliament on Wednesday as fears grow that rental prices could soar in the next two years.
As it stands, there is no legal requirement for leases in all states or territories to run for a minimum amount of time, though it is common for leases to run for six or 12-month periods.
The ACTU claims the proposal will provide more security to renters and save them money in the long run. Greg Briggs
However, the Australian Council of Trade Unions (ACTU) wants to introduce laws that require standard leases to run for at least two years, with tenants being able to request the option for a shorter lease.
ACTU President Michele O’Neil claims it would help provide more security, but would save renters money in the long run.
“You don’t have that disruption and all of that cost involved in having to find a new place to live, having to move - often having to move further away from where you work - that means you’re not only seeing rents go up, but the cost of commute going up and the time involved too,” she told Today.
“Having that security, knowing you can stay in the same place for at least wo years, will make a big difference for working people.”
Michele O’Neil insists the reforms would be favourable to landlords as well. Today
While rental laws are dictated by states and territories, O’Neil envisages the creation of a national body that would set national standards and act as a watchdog to ensure that fair laws are put in place.
She also hopes such a body would give more power to tenants to stop excessive rent increases.
“Already tenants can challenge excessive rent increases, but there’s no definition about what’s excessive, and its all the onus on the renter to fix that, [and] it’s hard and complicated,” O’Neil said.
“We want to make sure there’s a standard definition of what’s an excessive rent hike, and that the onus is on landlords to make sure they don’t do that, and there’s more protection for tenants.”
O’Neil claimed the rights of landlords to evict problematic tenants would not be compromised, and insists having longer standard leases will actually be useful for them too.
“[Landlords] often talk about the cost involved in finding a new tenant, the gaps in rent that get paid during that time, also if people are in a house for longer, it’s their home, they treat it like their home,” she insisted.
“There’s lots of positives in this for landlords as well as renters.”
The government has overhauled property tax in the latest budget. Supplied
The proposal comes as concerns grow that rents could increase by up to 30 per cent in the next two years as the changes from the governments overhaul to property tax take effect.
The removal of concessions to capital gains tax and the scrapping of negative gearing may lead to landlords increasing rents to cover for the loss of income from these changes, a report from NAB warned on Monday. The bank clarified the potential 30 per cent hike was only one scenario that may happen, and is not an official forecast.
O’Neil broadly supports the changes implemented by the government in this year’s budget, saying it will make the housing market fairer and take pressure off of the rental market, but said the data highlighted the need to introduce protections against rapid rent increase.
“We want to make sure that rent gouging protection comes in so that rents aren’t pushed up unfairly,” she said.
The ACTU has also called for one in evert 10 houses built in Australia to be dedicated to public housing, claiming the current number is closer to one in every 50 homes.
“[That] takes pressure off private rental market,” O’Neil claimed.
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