Premier firms on yearly limit to rent increases in property reform

The Premier says her proposed rent cap would limit landlords to a single rent rise per year, but neither side of the debate are impressed. VOTE IN THE POLL

• Editor’s view: Labor making it up for eight years

Landlords would be limited to a single price increase each year in a rent cap move canvassed by Premier Annastacia Palaszczuk — a policy one economist warned could encourage investors to lift rents by more severe amounts.

In another sign the Queensland government is winding back its controversial proposal following heated backlash from industry groups and economists, Ms Palaszczuk volunteered the option as a possible solution to assist tenants bearing the brunt of the housing crisis.

“People are reporting to me they are seeing rents going up $200 a week, $400 a week, and people are finding it so hard to make ends meet, especially with the higher cost of living,” she told Nine’s Today show on Wednesday morning.

“So one example that’s on the table is limiting those increases to once a year, rather than twice a year, to put a bit of downward pressure.”

Leading independent economist Saul Eslake was critical of the rent cap pitch earlier in the week, but said the updated proposal to limit the number of increases as opposed to a ceiling on the amount was a more reasonable approach.

But he warned landlords might err on the side of safety by imposing bigger increases.

The industry peak body responded furiously to the initial announcement of a rent cap but said it was open to a conversation about further tightening the frequency of rent increases.

Real Estate Institute of Queensland chief executive Antonia Mercorella described it as the best of the worst proposed controls on landlords.

“There are already statutory caps around how frequently rent can be increased,” she said.

“It would be our preference not to continue further rent control but we would be open to having a discussion.”

UNSW housing researcher Hal Pawson, who authored a landmark report on housing in Queensland that led to Ms Palaszczuk proposing the reforms, said the option floated was on the “extreme low end of ambition”.

He described the reform as a first small step along the way to governments having some influence on the rents tenants are paying, but insisted it should also be paired with a benchmark limit such as the Consumer Price Index — similar to the ACT.

“It doesn’t go to the heart of the problem (controlling huge increases in rent) — it’s touching the edges of the problem,” Professor Pawson said.

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Queensland Council of Social Service chief executive Aimee McVeigh said rental reform consisting of a single yearly lift was a “light touch intervention” that would be insufficient in providing a meaningful solution.

“We need some consumer protections,” she said.

“Almost 40 per cent of Queenslanders rent and those people deserve a fair rental market where they can be have some certainty about what the price of that basic human need for shelter will be.”

Mr Eslake stressed the tinkering of moderate rental reform was a poor substitute for alleviating the crisis by providing homes for those in need, citing a Productivity Commission report earlier this year that revealed Queensland social housing stock had only marginally increased in a decade.

“A more effective response to the undoubted upward pressure on rents and the insecurity that tenants are feeling as a result of that would be to do more to boost the supply of housing,” he said.