Capped rental rates "detrimental" to residential market
A recent proposal put forward by politicians aimed at curbing residential property rents would do more harm than good, according to one leading expert.
In a press release issued on December 1, the president of the Real Estate Institute of Australia (REIA) Pamela Bennett said that the implementation of such a scheme would have a number of negative impacts on housing affordability in the long term.
Bennett asserted: "To cap rents in the private rental market would be counterproductive to the objectives of improving affordability.
"Rather than capping rents in the private rental market, we need to be focusing on increasing supply in both the public and private rental market."
She then explained that mandatory pricing structures would reduce the supply of rental dwellings while in place - and would cause prices to rise exponentially once the measures were lifted.
"The proposal is not sustainable and when it is reversed, rents will soar. This is an extremely important issue and one that should not be taken lightly," said Bennett.
Under the initiative, the government would "monitor the rent costs in the private rental market" and apply pricing mechanisms in response to environmental fluctuations.