The Albanese government’s claims that recent federal budget changes to negative gearing and capital gains tax will result in a net rent increase of about $2 a week across Australian rentals is demonstrably false, new data shows, with some homes in Adelaide tipped to rise by $10 a week in the next three months.
New FoundIt data reveals the biggest hits to South Aussies’ hip pockets will be felt by those renting units across Adelaide City, Adelaide Hills and Charles Sturt statistical areas, where weekly rents are expected to rise by $10 in the next quarter – five times what the government claims.
Median unit rents are expected to rise by $9 in a further 12 areas – Burnside
Campbelltown, Holdfast Bay, Marion, Norwood, Payneham and St Peters; Onkaparinga, Port Adelaide-East, Port Adelaide-West, Prospect-Walkerville, Salisbury, Tea Tree Gully and Unley, while house rents are tipped to rise by $9 a week in the Burnside area.
House renters in a further 11 areas can expect an $8-a-week price hike.
FoundIt head of research Kent Lardner.
FoundIt head of research Kent Lardner said the government may have underestimated how much negative gearing incentives had contained rental rises.
He rubbished modelling included in the Budget that estimated that changes to negative gearing would only add “$2” to the typical rent paid by tenants.
“It will be sizeably more than that,” he said, describing the Treasury modelling as a “pipe dream”.
“These reforms will squeeze the very people it’s supposed to help,” Mr Lardner said, adding that increases in rent could make it much harder for tenants to save deposits and become first-home buyers.
He expected rental pressures to be most acute in affordable areas.
“Most of the markets where rents are going up the fastest are affordable markets,” he said. “There is a huge concentration of people competing for cheaper units.”
Rents are set to rise across Adelaide. Picture: Brenton Edwards
Mr Lardner said the rent rises projected in the data over the next three months may pale in comparison to rent rises over the full year.
“Rent rises in the next 12 months could be in the magnitude of over $50 a week,” he said.
“What’s already playing out is that landlords are realising others are increasing their rents.
“It encourages them to do it too.
“There is even a bit of chest beating going on about it online.
“This will eventually be tempered by affordability.
“Rents will reach the point where they are too unaffordable for landlords to increase them anymore, but they would need to rise a fair amount more to reach this point.”
Ray White Group chief economist Nerida Conisbee
Ray White Group chief economist Nerida Conisbee said many people were impacted by changes in the rental market.
“People still want to live near work, schools, transport, hospitals, universities, family and social networks,” she said.
“Young workers moving to the city still rent. Students still rent.
“Recently separated people still rent. Migrants still rent. People saving for deposits still rent.
“Older people who no longer want the responsibility of ownership still rent. Some people will never buy. Some simply do not want to.”
– with Aidan Devine
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