Organisation calls on government to boost supply to ease housing stress
A national coalition of housing, homelessness and welfare organisations has warned that thousands of renters could fall into housing stress this year due to properties being removed from an affordable housing scheme.
Everybody’s Home, which wants federal and state governments to support investment in 500,000 new social and affordable homes in Australia, says Australian government figures show that more than 6,600 affordable homes will be lost under the scrapped National Rental Affordability Scheme (NRAS) in 2023. The organisation says this will lead to steep rent rises for those affected.
The NRAS, which was launched by the Kevin Rudd-led Labor government in 2008, is designed to boost the supply of affordable rental homes for low and middle-income households. It provides property investors with financial incentives each year for up to 10 years for renting out their properties at a minimum of 20% below market rates to eligible residential tenants.
In 2014, the then Liberal government led by Tony Abbott scrapped the scheme, capping the number of subsidised properties at 38,000 and preventing any new entrants from being accepted. The scheme will come to an end in 2026.
Australia has one of the world’s least affordable rental markets and this has been exacerbated by rising interest rates and inflation, with fears from not for profit Dignity that the worsening problem could result in a “tsunami of homelessness”.
Everybody’s Home national spokesperson Maiy Azize (pictured above) said the losses of 6,600 affordable homes this year would be on top of Australia’s massive shortfall in social and affordable housing.
“Australia already has a social housing shortfall of 500,000 homes, and the rental market has never been tougher,” Azize said. “These figures show that we’re losing even more affordable rentals at a time when Australians can least afford it.”
Azize said given that thousands of affordable rentals would disappear this year, “we need the federal government to step up and take action”.
“We’re calling on them to build 25,000 new social homes each year to help end this crisis,” he said. “More social housing would lift people out of rental stress, and free up more cheap rentals for people who need them.
“Many Australian suburbs have hit record high rents and thousands of tenants are in rental stress. The government can start changing that from this year if it’s ambitious enough.”
The government’s NRAS figures showed that Queensland will be the hardest hit by the phasing out of the scheme, losing 2,499 affordable houses in 2023. Victoria will lose 1,356 allocations, while Western Australia will lose 1,110. In South Australia, 806 houses will be removed and NSW will lose 605.
Last year, more than 5,000 homes were scrapped from the scheme nationally, including 2,036 in Queensland, 1,037 in Victoria, 719 in the ACT, 399 in SA, 326 in NSW, 293 in WA, 128 in Tasmania and 97 in the Northern Territory.
The current federal government has not moved to extend the NRAS, but Minister for Housing Julie Collins said it was working hard to provide more affordable housing. The government has released its draft legislation for the $10 billion Housing Australia Future Fund, which promises to provide 30,000 new social and affordable homes in the fund’s first five years.
Azize said the RBA’s latest interest rate hike in December would not bode well for Sydney renters in an already tight and unaffordable market.
Everybody’s Home analysed the SQM Research Weekly Rents Index for the week ending December 4, which showed asking rents in the Sydney basin had increased by $80 to $275 per week over the past year.
Western Sydney tenants were paying $118 extra a week in rent compared to a year ago, while across Sydney, rents had risen by up to $177 a week over October, November and December.
Azize said renters were absorbing the costs of inflation.
“Rents have been on the rise well before interest rates climbed, but every rate increase adds more pressure to an overheated and unaffordable housing market,” she said. “Another interest rate hike means renters will be worse off if their landlord passes on an increase. This will deepen housing stress for thousands of people.”
If nothing is done, people will be pushed deeper into housing stress and even homelessness, said Azize.
“We’re calling on the government to take action and make sure everyone has a place to call home,” Azize concluded.
