Victoria rental crisis: market ‘firestorm’ leaves families homeless, living in tents
Housing experts are calling on the government to overhaul how they govern the state’s rental market as families are left homeless. Hear what the experts say needs to happen to fix it.
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Victorian housing experts are calling on the government to immediately increase the number of homes available for lease amid a “firestorm” for tenants and landlords.
A Herald Sun investigation has revealed families are being split apart as they’re forced to move from Melbourne to regional cities to find rentals, while others are living in tents at caravan parks as they search for their next home.
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Some have revealed they are living in dangerously dilapidated properties as they fear they won’t find anything else.
Real Estate Institute of Victoria’s chief executive Quentin Kilian said the Andrews government needed to be attracting supply into the market and should ignore “kneejerk” reactions like imposing a rent freeze currently mooted at parliament by the Greens.
“What we need is for policies that start to attract and incentivise people to either bring properties onto the market, to bring them back from Airbnb or to become landlords for the first time and bring new properties into the marketplace,” he said.
“All that’s doing (rent freeze) is driving landlords away and destabilising the market even further … it’s actually going to create more problems and more demand and less supply.
“I am very, very concerned that we are going to see a firestorm in the sense of demand far outstripping supply.”
It follows a week in which Premier Daniel Andrews was quoted in other News Corp publications attacking the Greens renters’ rights spokesperson Gabrille de Vietri, after she said Labor had turned their backs on renters.
Mr Andrews said the Greens were nothing but “voyeurs” who blocked more housing than they’d built and were in the “cheap seats” of parliament.
It comes after PropTrack research revealed Melbourne’s median rent increased from $400 a week last year to $470 a week in June 2023, a $70 (17.5 per cent) increase.
It’s also now $40 above the rental market’s last peak at $430 in 2020, and $80 above the $390 median set as the final lockdown ended in 2021.
Launch Housing’s executive director of homelessness solutions and impact Laura Mahoney said the demand for crisis accommodation and rental assistance had surged with a growing number of tenants facing homelessness.
“We’re experiencing a significant increase in demand at our three crisis entry points in Melbourne, and there are fewer and fewer options for emergency housing for people who have nowhere safe to sleep,” Ms Mahoney said.
She added that through their Launch Housing’s Private Rental Assistance Program, which assists people facing homelessness remain in the private rental market, demand for help with rent arrears had blown out by 110 per cent between 2018 and 2022.
Tenants Victoria chief executive Jennifer Beveridge said the Victorian Government needed to reform its rules regarding rent rises in Victoria, as well as invoke better regulation of short-stay accommodation.
“There are no rules about the size of rent rises in Victorian rental laws,” Ms Beveridge said.
“We believe the government should legislate for a ‘fairness formula’ to regulate the amount that rent can be increased by. This will ensure more certainty for renters.”
A Victorian Government spokesman said they knew the housing system needed reform.
“We’re working hard on a package of reforms that will come later in the year, and we will have more to say in due course,” he said.
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“But we’ve already taken action to deliver a pipeline of more housing – with the $5.3 billion Big Housing Build providing 12,000 social and affordable homes across the state, including for long-term private renters, and build-to-rent incentives helping to boost stock for long-term renters.”
The 12,000 new homes are not expected to be finished until at least 2026.
Housing Industry Association chief economist Tim Reardon said Victoria typically needed to build 50,000-60,000 new homes a year to meet demand, but now needed to work “at capacity” for two or more years to catch up.
With rising immigration and the pandemic leading to more bedrooms being used as work-from-home spaces rather than rented out, HIA is now estimating that figure is closer to 70,000.
“What we’re seeing instead of course is detached home building slowing; and the volume of apartments commencing construction is around half of where it was in 2016,” Mr Reardon said.
Latest Australian Bureau of Statistics building approvals data released last week shows 18,249 new dwellings were approved for construction across Victoria from January to May this year, the slowest start for the home building sector since just 16,550 were approved in 2009.
The state is currently more than 7000 new homes behind the same time last year when 62,155 were approved, and likely to fall well short of the HIA projections.
In the National Housing Financial and Investment Corporation’s State of the Nation’s Housing 2022-23 report, Melbourne is expecting a shortfall of 24,000 homes over the next five years.
It’s figures like these that have Jess (pseudonym), a single-mum living in Ringwood North, paying $440 a week for a home she’s called a “disaster zone”.
“My floorboards have gaps in them, my ducted heater’s not even attached to the vents; I can’t even keep my house warm; I walk out to my back stairs and the stairs aren’t attached to the house,” she said. “So I’ve got to jump over to come down.”
“My daughter can’t sleep in her bedroom because we had a leaky roof and there’s black mould in the ceiling and (my landlord) refused to fix it.”
Not only is Jess scared afraid to lose her home if she speaks up about the issues, she said she can’t even find another rental.
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