Government should step in as number of affordable rental properties dwindles

The most recent data about the cost of rental accommodation has revealed a substantial decline in the provision of affordable rental accommodation throughout Victoria.

This has occurred at the same time as we are experiencing the most substantial shortage of rental accommodation in the last few decades. The shortage of housing put pressure on rents, with an outcome of far fewer affordable rental homes.

The data, sourced from the Victorian government’s Office of Housing, tells the story.

In the decade between the September quarters of 2001 and 2011 there was a 55% reduction in the number of affordable rental homes in Melbourne and a 19% reduction in regional areas. A decade ago Melbourne had about 14,000 affordable rental homes – now it is about 8,700.

This translates to greater competition for the few affordable rental homes that are available, and tenants having to pay rents that they cannot afford or being forced to live in areas far from employment.

The location of affordable rental homes has also changed. The highest availability for affordable rental homes is in regional Victoria, and what few affordable rental homes were available in Melbourne’s middle suburbs have disappeared.

A decade ago 50% of rental homes in the City of Knox were affordable, and now only 6% are. During the same time there was a drop from 47% to 3.5 per cent in the City of Maroondah and from 28.5% to 1.7% in the City of Moreland.

To address this problem the state government needs to increase direct investment in affordable and low-cost public housing, remove the opportunist taxes on investors and reducing the cost of development by improving the planning process.

Enzo Raimondo is CEO of the Real Estate Institute of Victoria.