NSW Minister Anoulack Chanthivong warns rental caps will pit owners against tenants

Minister tasked with resolving NSW’s rental crisis warns price caps will only serve to undermine supply while pitting owners against tenants.

NSW Fair Trading Minister Anoulack Chanthivong has warned rental caps will undermine efforts to increase housing supply.

The NSW Minister tasked with resolving the state’s rental crisis has warned price caps will exacerbate the housing crisis by undermining supply and pitting owners against tenants.

The nation’s state and territory leaders were tasked by Anthony Albanese at last Friday’s national cabinet to find solutions for the nation’s worsening rental crisis as an influx of migration and stagnating housing construction has put upward pressure on prices.

But with federal and NSW Greens calling on the government to freeze price increases for two years, Fair Trading Minister Anoulack Chanthivong said capping rental increases would only create perverse impacts in the housing market.

“Owners need renters and renters need more owners in the market to reduce prices, so there’s no point pitting one against the other or undermining supply through measures like rent caps,” he told The Australian.

“Our focus is on getting the balance right by implementing responsible reforms that reduce stress and pressure for renters while also looking at ways to drive new supply into the market.”

He instead pointed to the creation of the NSW Rental Commissioner who would look at “both sides of the ledger”, identifying ways to make the housing system fairer for renters while deconstructing the “barriers and blockages” that put upward pressure on prices and delay housing supply.

“Right now, we’re getting on with changes to make it easier for renters to move or find a home by making bonds portable and ending secret rent bidding,” he said.

The NSW government will close applications for the rental commissioner role on May 16, but say there is no timeline for when the position will be filled.

Mr Chanthivong, Planning Minister Paul Scully, Housing Minister Rose Jackson – who attended a meeting of state and territory leaders on Wednesday trying to build reforms to protect renters – will work across their respective portfolios to find solutions to the state’s housing crisis.

Premier Chris Minns has already ruled out the prospect of rental caps in NSW, but downplayed the potential impact his government might have on soaring prices, which according to PropTrack, Sydney asking rents climbed 7.7 per cent through 2022.

“I’m not going to proclaim that we can produce miracles,” he said in early April

NSW Property Council executive director Anita Hugo echoed Mr Chanthivong ’s sentiments, saying the “chronic under supply of homes” had been exacerbated by soaring interest rates, inflationary pressures and the return of migrants after the pandemic.

“Imposition of rental caps would only make the housing crisis worse in NSW, not better,” she said.

“Rental caps would stymie the flow of investment into new housing and send the wrong signal to the development sector at a time when we need a drastic upscaling in our supply response.

Ms Hugo said the state government had several levers available to address sluggish supply, including restoring accountability into the planning system, increasing planning capacity and delivering “real housing choice” within communities.

“To ensure greater whole-of-government co-ordination, particularly the alignment of infrastructure and utilities decisions with the identification of growth precincts, the NSW Government should elevate housing supply and affordability as a Premier’s Priority,” she said.

“It’s also critical we shift our focus to rewarding local councils that meet housing targets – through incentive-style payments – while red carding councils who refuse to share in the growth agenda of the state.