Scott Morrison’s comment last month that “the best way to support people renting a house is to help them buy a house” was seized on by some as a “let them eat cake moment”.
The prime minister was responding to a question from Channel Nine’s Today Show about why the federal budget hadn’t done more for renters. The query was unusual because renters typically get far less heed from media and politicians than homeowners, despite them making up about a third – and rising – share of the population.
The scant attention is curious given the plight of renters is generally deteriorating nationwide. According to CoreLogic, average rents rose 12.9% in the two years to March, which is seven times the 1.8% increase of the preceding two-year period.
The well-publicised outflow of city folk to the regions during Covid is also making it worse for locals. Regional rents have increased a fifth in those two years, or double the pace of the increase in state capitals, CoreLogic data shows.
Groups from the Australian Council of Social Service to the Committee for Sydney have led calls to address housing affordability that have produced little substantial policy from the major parties, at least federally. That results fall so far short of needs reveal much about the sort of society we live in and where we’re headed. That is, one with a falling share of people owning their homes in almost all age groups.
As one senior member of the NSW government told me recently, housing has gone from an essential “roof over our heads” to a commodity for wealth accumulation and speculation. Federal and state policies had largely served to steer ever more money into the sector, favouring those already in the market.
The media, too, seems conflicted. Open up a newspaper, particularly on a Saturday, and readers can ogle glossy property magazines and articles touting celebrities trading trophy homes. Both News Corp and Nine Entertainment, the nation’s dominant media groups, rely after all on the property-spruiking REA Group and Domain, respectively, to shore up revenues.
Cost of living issues alone suggest more coverage on rents is warranted.
Within the basket of goods and services that the Bureau of Statistics uses to track consumer price increases, rents carry twice the weight of transport fuel. Despite that, they drew far fewer stories than “pain at the bowser” tales that recently panicked the government into halving the fuel excise until after the election.
Regional renters, though, have an extra reason to feel neglected. The ABS bases the rental weighting within the CPI on capital cities only, meaning the recent run-up in regional rentals has not been picked up in the inflation figures.
The latest data, out on Wednesday, showed rents rising again in all cities, including Melbourne and Sydney which had been hard hit by the absence of foreign students during the Covid lockdowns. A revival of migration will accelerate those rises.
Housing issues have been slow to become a focus in the campaign, despite rising expectations the Reserve Bank will soon start lifting interest rates – and keep raising them for the next couple of years – to stem inflation.
ASX futures market shows investors predict the RBA's cash rate will be at 2.5% by the end of 2022, whether or not the central bank makes its first move on 3 May. #ausvotes #auspol pic.twitter.com/B2O25E5vm9
— Peter Hannam (@p_hannam) April 29, 2022
As another instance, the Greens’ promise of 1 million more low-cost homes, the most ambitious of the parties in the election, was all but ignored despite the policy making up a large part of Adam Bandt’s National Press Club speech on 13 April.
The media instead focused on the Greens leader’s “Google it, mate” slapdown, and pledges to aid dental care and halt coal and gas projects. The omission surprised advisers who remain keen to get the issue back in the spotlight.
The policy would not come cheap, decreasing the fiscal balance by $7.5bn and the headline cash balance by $30.8bn over the budget forward estimates period, the Parliamentary Budget Office said.
For the ALP, the top task is 30,000 “new social and affordable housing properties” over the first five years. The Coalition, meanwhile, is stressing home ownership, while “incentivising” regional home construction.
In a comprehensive study for the Australian Council for Social Service Acoss led by University of New South Wales professor Hal Pawson, the authors examined how governments dealt with Covid from a housing perspective, and what it revealed about their priorities.
“Income support did more to absorb the income shock of the pandemic, to a significant extent letting housing policy and, especially, landlords, off the hook,” they said. “Restrictions on evictions and rent increases were lifted just as many regions were seeing a major escalation in rents and tightening availability.”
“This strengthens the sense that housing policy objectives around affordability, security and prevention of homelessness are still lower priorities than maintenance of housing asset values, rent revenues and loan serviceability,” they said.
Pawson said that while the house price cycle was likely to be near its top, ahead of those RBA rate rises, rents would probably keep rising.
Pawson cites 1996, the year the Howard government took office, as a “break point” when the annual national social housing construction program finished.
Since then Australia’s population has swelled 30%, but the stock of social housing has grown only 4% even taking in a burst of spending during the global financial crisis by the Rudd government.
“In the last few years, we’ve only barely been building enough to make good the loss from demolition and sales every year,” Pawson said.
In the past 10 years, social housing has made up just 1% to 2% of new homes built. By contrast, in the quarter-century after 1945, one in six homes were public housing.
“There is a historical precedent for this in Australia, of the state being a substantial source of housing production,” Pawson said. “It’s just we’ve forgotten that we ever did it.”
