The rental supply crisis in New South Wales has reached a new high, with the Real Estate Institute of NSW calling on the state government to take action.

CEO Tim McKibbin stated that a healthy rental market benefits everyone, but currently, none of the characteristics of a healthy market are present.

McKibbin warned that 2023 would see added pressure on the rental market, including increased immigration, population growth, and the aftermath of last year’s floods.

He noted that tenants are facing challenges such as a lack of supply, landlords leaving the market, and rising rents that can lead to homelessness.

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However, he also noted that the new year presents an opportunity for the government to work with the industry on a coordinated response, pointing out that politically-driven measures targeting agents and landlords have not helped.

The institute has made recommendations to the government with the goal of repairing the rental market, urging the Liberal Party to avoid implementing policies such as ending fixed-term leases, rent freezes, and an anti-landlord media campaign.

McKibbin’s five recommendations are to:

  • Build new housing quickly in areas with good transportation and amenities.
  • Make local councils responsible for providing housing through appropriate housing targets.
  • Reform property taxation to reduce or eliminate taxes like stamp duty, property tax, and other fees, which discourage investment in residential property.
  • Respect landlords’ right to manage their investments by allowing them to negotiate fixed-term leases with tenants.
  • Foster respect among all stakeholders and stop the anti-landlord media campaign, as the rental crisis won’t be solved by creating conflict between landlords, tenants, and agents.

30% of Australia’s population rents and 90% of those renters live in accommodation provided by private landlords. Given this, the industry leader believes encouraging, not discouraging, investors is more important than ever.

“We’re seeing some investment property owners turn to the short-term accommodation market or simply sell up in favour of other investments, as the weight of regulation forces them to seek other options to meet their income and repayment needs,” Mr McKibbin said. 

Mr McKibbin concluded: “A healthy rental market is an environment in which tenants have a choice, landlords have their rights and security protected, investors are encouraged to invest in residential property and make homes available to tenants, and developers have the confidence to proceed with new projects.”