Since the May budget scrapped or tightened negative gearing and capital gains tax breaks for investors, weekly costs have climbed at three times Treasury’s forecast rate of just $2 per week.
A search of rental advertisements shows some price increases are already hitting double digits.
In Calamvale, a “spacious” five-bedroom double-storey home on Caravonica Court is slated for a $240 weekly rent hike in December – a 29.6 per cent jump from $810 to $1050. Come January, a two-bedroom brick townhouse in Springwood’s Capertree Gardens gated community will see a similar spike, rising from $500 to $610 per week.
In nearby Woodridge, a four-bedroom townhouse with no garage on Albert St is calling on new tenants to pay an extra $100 from February, to $650 per week, while a two-bedroom weatherboard house on Horton Street in Kingston will increase from $460 per week to $550 in two months.
A quirk in state laws that ties once-annual rental increases to the property rather than the lease agreement allows Queenslanders in some instances to see the exact date of their next increase and how much it will rise.
Dr Chalmers’ electorate of Rankin is a suburban hub sandwiched between Brisbane and the Gold Coast, taking in most of Logan and part of the capital city’s south. With a higher proportion of clerical, trade workers, and labourers than the rest of the nation, the typical household weekly wage of $1610 was 8 per cent lower than the national average at the 2021 census. The electorate is also home to a higher proportion of renters, who make up 36.3 per cent of households. A third are dedicating more than 30 per cent of income to weekly payments.
Housing economist Cameron Kusher said rental increases were likely to impact more affordable areas such as Logan as rising rents in inner-city areas pushed renters further towards suburban fringes, causing a ripple effect on rents.
“It’s places like Logan, like western Sydney, I say, will probably see the strongest rental growth because they’re the areas where renting is more accessible to more of the population,” Mr Kusher said.
“Those outer suburbs (of capital cities) have got very tight rental markets at the moment, and even though in a lot of instances they’ve got quite a lot of new houses that have been built. Clearly there’s quite a lot of demand for rental properties in those areas, and the affordability factor is a big driver of that.”
New analysis from Cotality for The Australian has found that rental prices in Rankin, which covers much of Logan, are rising faster than the national average and have already increased $7 a week since the May budget removed negative gearing and capital gains tax breaks for many investors.
While weekly asking rents in the working-class suburban electorate were already up $7 for houses to $734 – higher than the national average of $724 – and units had risen $8 to $567, landlords had flagged triple-figure changes. Pilates instructor Nicole Van Amstel, 33, is preparing to move out of the Springwood townhouse she rents with her husband for $550 a week. New tenants can move in from September, but their rent will be hiked to $700 two weeks before Christmas, a 27.3 per cent increase.
The couple have purchased their first home, but Ms Van Amstel said it was no thanks to the Labor government. Rising rents and utilities had made it harder to save, while the expansion of federal schemes and state-based grants had pushed up house prices at the lower end of the market. “What they’ve done to make it easier for people to get into the market has actually driven the house prices up”, she said. “I technically paid a bit more for this house.”
After the couple’s rent rose $60 a week last year, Ms Van Amstel said a triple-figure rise would have made it near impossible to save.
“I would have had to look for another rental, to be honest,” she said. “We just had to cut costs at home in terms of living costs. It wouldn’t have helped my savings … not to mention the other price increases in terms of electricity and utilities.”
Logan real estate agent Avi Khan said the federal government policy was proving to be a massive “own goal”, with rental demand in Queensland’s fastest-growing region continuing to grow and the rental market unable to keep pace.
The group chief executive of Ray White AKG said 25 groups showing up to view prospective rentals was not uncommon
“This policy has not helped first-time buyers, and this will actually further worsen housing crisis that we have,” he said.
Dr Chalmers said a number of factors influenced rents and that it was “not correct” to attribute rises to the budget.
“Our reforms to negative gearing are grandfathered, so any existing investor who says they are increasing rent because of this change is not being honest with their tenants,” he said.
“Treasury estimates the impact on rents from our tax changes will be negligible. In fact, the combined tax cuts we have delivered are about 27 times bigger than Treasury’s estimate of the impact of our changes on rents.
“Our policy is all about helping more renters buy a home of their own at the same time as we boost new housing supply, which takes pressure off rents over time.”