Rents have blown straight past Treasury’s modest warning, with new figures showing tenants are being hit far harder than the $2-a-week rise flagged when the government unveiled its headline tax reforms.
PropTrack data shows national rents surged 3.1 per cent over the past three months, piling an average $21 a week onto the typical asking rent for houses, units and townhouses across the country.
The three month period represents the first quarter since reforms to negative gearing and capital gains tax were leaked in April ahead of the May budget.
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Queues outside rental inspections have become the norm in some areas. Picture: NCA NewsWire / Nicholas Eagar
In a brutal blow for renters already stretched to breaking point, the fresh numbers suggest the real-world impact has landed at more than 10 times the increase Treasury had predicted.
When the government moved to reshape negative gearing and capital gains tax concessions in what it billed as landmark housing reform, Treasury modelling in the federal budget pointed to only a $2 a week hike on rents.
The PropTrack data showed a varying impact across some of Australia’s key capitals over the June quarter:
MELBOURNE
How much Melbourne tenants have been impacted since Budget
Realestate.com.au data shows Victoria’s capital copped a more than $20 (3.5 per cent) hike in typical weekly rents to reach $600 in the June quarter.
Treasurer Jim Chalmers’ budget forecast a $2 a week rise from the tax reforms. Picture: Hilary Wardhaugh
Industry experts say that the Albanese government changes to negative gearing and capital gains tax benefits for investors, as well as a growing list of state government rental reforms and even rising interest rates could all lead to more rent hikes for tenants.
Property Investors Council of Australia chairman Ben Kingsley said Victorian rents were likely to continue rising.
“It’s the perfect storm for renters in respect of less supply, high demand and high costs, and so tenants are absolutely going to be paying significantly higher rents in the state of Victoria over the foreseeable future.”
SYDNEY
How much more Sydney tenants are paying
Sydney house rents have climbed by an average of $50 per week in the past three months as recent government tax reforms spark an exodus of new landlords from the market.
PropTrack senior economist Luc Redman said the full impact of negative gearing reforms was still emerging.
Newly released figures from research group PropTrack showed Sydney house rents climbed by 6.3 per cent over the period and now average a record $850 per week – the highest in the country. The rise will add $2,600 to the annual rent bill of the average house tenant.
Unit rents increased an average of 4 per cent, or $30 per week, over the same period, with Sydney tenants paying more per week for apartments than every other capital’s residents paid to rent houses.
BRISBANE
Brisbane’s rental prices have reached an all-time high, climbing to an average of almost $700 a week as recent government tax reforms spark an exodus of new landlords from the market.
The latest realestate.com.au market insight report shows Brisbane’s median advertised rent has jumped 2.2 per cent in the quarter to $695 a week.
Vacancy rates remain tight in Brisbane and across much of the country.
The increase is 1.5 times higher than last quarter’s rise of 1.5 per cent.
Master Builders Australia chief executive Denita Wawn said the tax changes were already hurting an industry that was dealing with an 11.2 per cent drop in build starts – further limiting rental supply.
“Builders are telling us that uncertainty created by the federal budget is affecting confidence and slowing investment decisions,” Ms Wawn said.
ADELAIDE
See how Adelaide rents have been impacted
Adelaide rents are still climbing but they have done so at a much slower pace over the past year than any other capital city across the country, as tenants struggle to stretch their budgets much further.
Latest PropTrack data shows the median advertised rent for an Adelaide property – which is based on both houses and units – is 4.2 per cent higher than a year ago at $625 per week.
It was the lowest pace of annual growth recorded of any capital city, trailing Canberra’s 4.8 per cent to take its median rent to $650 per week.