You might have noticed that the property lobby is having a meltdown.
You can almost set your watch to it. The moment anyone suggests winding back investor tax breaks, the same talking points come flooding out. Rents will skyrocket. Investors will flee. The market will collapse. Renters will suffer.
There’s just one problem: renters are already suffering under the exact system the property lobby is defending.
If these tax breaks are supposed to keep rents low, renters across Australia would probably like a word.
Over the past decade, rent prices for houses have exploded. Nationally, renting a house costs about $450 more every week than it did 10 years ago. In capital cities, the increase is even worse at $500. For many households that is the equivalent of an extra $25,000 a year.
This is the system the property lobby wants to hang on to. A system where taxpayers spend billions lining the pockets of investors who make losses and chase short-term gains. A system where housing is treated less like shelter and more like an asset class. A system where investors are encouraged to pile into the market, outbid ordinary homebuyers and then demand ever-higher rents to sustain the game.
We are now expected to believe this is somehow helping renters. That is an insult to the intelligence of anybody who has ever rented in Australia.
People living through this housing crisis know exactly how the current system works because they experience it first-hand. They are the ones getting hit with relentless rent increases every year. They are the ones being forced to move because they cannot absorb an extra $80 or $100 a week. They are the ones living with constant churn because landlords decide it is time to cash in and sell.
If they try to buy a home themselves, they find themselves competing against investors whose pockets are being lined by taxpayers through generous tax concessions.
The property lobby talks as though investors are selfless public servants generously providing housing out of the goodness of their hearts. In reality, many are pursuing capital gains turbocharged by tax breaks that reward speculation.
If this model provided affordable housing, Australia would have some of the cheapest rents in the developed world. Instead, we are living through the worst housing crisis in living memory. Rents have been surging for years partly because investor tax breaks have been fuelling the housing crisis. The idea that the solution is to double down on the same approach is absurd. That’s why the government is right to wind back these tax breaks that have only made housing more unequal and more unfair.
What makes the scare campaign so dishonest is that investors who already own properties get to keep their perks. Much to the frustration of many housing advocates, the negative gearing changes are being grandfathered in.
So when sections of the property industry start talking up rent rises in response to reforms that do not even apply to them, renters should see it for what it is. It is profiteering dressed up as economic analysis.
There is no excuse to raise rents because of these reforms. None. If landlords choose to push up rents anyway, that is not the government forcing their hand. It is an opportunistic decision designed to profiteer from renters while blaming someone else.
The property lobby is perfectly entitled to be upset about the prospect of future taxpayer subsidies being wound back. They are not entitled to mislead the public about what the reforms do.
And if the lobby genuinely cares as much about renters as it suddenly claims to, there is a simple solution. Tell landlords there is no reason to raise rents. Better yet, join calls for stronger renter protection and limits on excessive rent increases.
But that would require admitting something the lobby never wants to say out loud: the current system, with its huge rent increases, is working exactly as it was designed. It is just not working for renters.