Melbourne rental crisis: Immigration and Big Build cuts join foreign investors and Airbnb review on solutions list

Experts have flagged that cuts to Victoria’s immigration and Big Build — or even copying international housing models — are among the ideas that could fix Melbourne’s rental woes.

Experts have revealed what can be done to ensure Melbourne doesn’t see mega lines for rental inspections in the future, like this one seen in the inner suburbs earlier this year. Picture: supplied Jade Costello.

Property experts from across Australia have revealed some of the best ideas to fix Victoria’s rental crisis.

From the obvious to wild ideas just ludicrous enough to work, it’s the list decision makers need to consider.

Consulted experts include: PropTrack chief economist Cameron Kusher, Housing Industry Association chief economist Tim Reardon, Real Estate Institute of Victoria chief executive Quentin Kilian OAM, Stockdale & Leggo chief executive Charlotte Pascoe, and Council to Homeless Persons chief executive Deborah Di Natale.

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Incentivise landlords

For landlords who keep a property tenanted for five years, a grandfathered land tax deduction for those five years and ongoing discount so long as a property remains regularly tenanted would entice many to keep their properties in the market.

This might also encourage owners of homes currently left empty to make them available.

More build to rent

Build-to-rent developments currently target wealthier renters and feature luxury amenities like pools, but finding ways to scale this down to a more affordable level would boost long-term affordable rental options. Requiring developers to provide 20 per cent of future projects as affordable housing is one idea mooted.

Build to rent projects, in which corporate landlords build entire apartment complexes to lease out to tenants in bulk, are starting to appear in Melbourne.

Cut back infrastructure spending

Postpone niche infrastructure projects with less substnative cost-benefit analysis figures and divert funding to building new social housing.

Boost rental assistance

Increases in federal government funding to lower-income households struggling with rental payments would help them cope with higher demand for affordable private rentals.

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Incentivise foreign investors

Punitive taxes have turned many offshore investors away. Reducing or removing these where foreign buyers offer a newly build home for rent could help boost housing supply.

Singapore-style public housing

Singapore’s government-run Housing and Development Board creates quality, affordable housing including homes for lower-middle income families to rent as well as units and executive condominiums to buy as a 99-year lease.

Singapore’s skyline includes government-built apartments that cater to everyone from those seeeking luxury condos to those needing affordable rentals.

Raid Airbnb hosts

While not all Airbnb properties would suit the long-term rental market, a portion of suburban and inner-city offerings could rapidly add supply. Incentives to landlords might entice owners of such homes to do so without forcing them to.

More social housing

Building at least 6000 new social housing dwellings across Victoria is necessary to assist the most at risk households in the state, with work needing to commence urgently.

First-home buyer support

Raising the cap on key first-home buyer programs such as the stamp-duty-free threshold and reviewing support provided could also help more to get more people out of the rental market.

Helping renters to become first-home buyers would help alleviate pressure on rental listings.

Review migration

Reducing migration to Victoria could reduce competition for rental homes, but has economic risks that would need to be closely monitored. Fast-tracking visas for those who move to regional areas with better vacancy rates could minimise population growth in tight metropolitan rental markets.

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Originally published as Melbourne rental crisis: Immigration and Big Build cuts join foreign investors and Airbnb review on solutions list