Chapter:
15 - Housing
Mover:
Seconder:
 
 
Source:
EEIRT Policy Committee
My Private Notes


Preamble
​With rental pressures becoming a key part of the national conversation on housing, the ACT remains ahead on rental reforms, with markedly lower levels of rent stress according to ABS Census results.

Rental prices remain a challenge for entry-level and key worker groups. The SQM Research median rent for apartments in April 2024 is $574 per week, for many workers and low-income retirees in excess of 30% after-tax income. The median for all housing types of $665 is exceedingly high for many households, limiting their discretionary consumer spending and the diversification of the ACT’s economy.

For a worker on $90000 annually pre-tax, near the median for a full-time ACT employee, the rental stress threshold is around $400 per week, around one-third below current levels (or $600 is 50% above). This excess is a cost-of-living pressure for families, and diminishes the capacity of all renters aspiring to home-ownership to save for a deposit.

Per Capita recently found that:

‘while 85% of non-homeowners still hope to buy a home at some point, fewer than one in four (24%) expect to be able to do so. Almost two-thirds of non-homeowners say that the only way they will ever be able to buy a home is if they receive a large inheritance.’.

Many vulnerable Canberrans on much lower incomes than $90000 remain in the private rental market, some waiting access to social and public housing for extended periods, many performing essential work in key sectors. A large majority in key sectors like community services workers, and in key groups like single parents and lower-income single persons are women, and reform in this area is key to women’s economic security. 

A catch-up of wages and CPI-linked transfer payments to rents is indicated for the wellbeing of many in the private rental market, bolstered by further investment in social housing, including build-to-rent. Yields and capital gains for ACT housing are high compared with alternative investments, and investor demand for land sales and build-to-rent opportunities (with rents below market rates) are strong.

General Resolution

Supporting sustainable growth of rents

ACT Labor welcomes the recent moderation of rent prices eight years' strong growth, reflecting a success of the ACT Government against an adverse national trend, and calls on the Government to consider a formal target for median rents of 30% of renters' median after-tax income. 

In pursuing this goal, ACT Labor calls on the Government to closely engage with tenants, community groups and investors, including build-to-rent providers, with a focus on scaling-up supply- and demand-side responses, including potential buy-back programs. This engagement should also clearly attend the severe and direct effects of rental affordability failure on women's economic security.

This target will support the balance of consumer spending on housing and on other sectors important to the ACT's economic growth and diversification, and demonstrate once more the ACT's leadership on evidence-based housing policy reform that delivers for workers and supports productivity outcomes. Innovative models like build-to-rent would be well-aligned with this reform.

These improvements to housing affordability would go a long way to improving the ACT's attraction and retention of entry-level and key workers, allowing renters to save for a deposit, and bolstering Labor's policy for home ownership