As housing prices soar and millions face the prospect of renting for life, Opposition Leader Peter Dutton has been sprung with a $30 million property portfolio.
He’s not alone, however, as more than 70% of MPs own two or more properties.
The divide between the “haves” and “have-nots” is becoming more pronounced as home ownership rates fall. A new report by Everybody’s Home has found that even middle-income earners are struggling with rising rents.
Workers on higher wages have been told the best way to grow their nest egg is by purchasing a home, after which they are given tax incentives to leverage that value to buy investment properties.
The “haves” then rent them out to help pay their own mortgages while lower-paid workers, who cannot afford to buy, are slugged with higher rents.
Priced Out 2025 said a person needs an income of $130,000 a year to avoid rental stress. This figure is far above the average annual wage of $102,741 and almost double the median income of $72,592.
It found that most renters pay a huge percentage of their weekly income on rent, often far above the 30% benchmark that is widely accepted as “rental stress”.
Some lower income households spend 70% or more of their weekly income on rent, leaving them stretched for energy bills, groceries, medical bills and travel costs.
It found that someone paying the weekly median rent for a typical two-bedroom unit, $566 a week, and earning the median income, about $1396 a week, pay about 41% of their income on rent.
Part-time workers (who are mostly women) on a median weekly income of $769 are paying a whopping 74% of their income on rent.
It found that for those on the lowest income, $40,000 a year, rent is “completely unsustainable”, given it accounts for 41%–119% of total income.
Previous Priced Out reports have shown there are no affordable rentals across the country for those on income support payments.
Rents are also continuing to rise, far outpacing wages, let alone those relying on welfare payments.
Priced Out said median rents for a unit rose from $372 a week in March 2020 to $566 in March. Weekly median rents in Sydney ($708), Perth ($636), Brisbane ($594), Canberra ($575) and Melbourne ($570) were the most expensive, leaving even high-income earners struggling. Rents are even higher for houses, with a median weekly price of $857 in capital cities.
“Virtually no region of Australia is affordable for people on low and middle incomes,” the report said.
Labor doesn’t have a national plan to address extortionate rents. Its focus is on helping build 30,000 so-called “affordable” homes and 1.2 million private homes, over the next five years.
This focus on supply does nothing about structural inequality.
Housing supply has outpaced population growth for 12 years, meaning that it not the cause of the affordability crisis.
Investors have flooded the market as capital gains tax (CGT) concessions and negative gearing make housing one of the most lucrative ways to profit.
While stock markets rise and fall — more so with the Donald Trump unpredictability factor — housing costs continue to rise.
A September Deloitte report showed that even a modest reform to restrict negative gearing to new homes and reduce CGT concessions from 50% to 25% would reduce house prices.
But Claire O’Neill, Labor’s housing minister, does not want house prices to fall and said as such.
Labor’s “Help to buy” scheme, which targets the better-off, further inflates house prices as buyers with more funds compete with investors and each other, and push prices up.
Labor has expanded access to the scheme, lifting the singles’ income cap from $90,000 to $100,000, as well as lifting property price caps.
Its decision to raise Commonwealth Rent Assistance may benefit some but, in reality, it is a massive cash transfer from the public purse to landlords.
One reason the major parties want to keep house prices high is to keep the capitalist class, which they primarily serve, onside.
Remember the housing and rental crises when you vote this election. Not only do we need a nation-wide rent freeze, we also need our taxes ploughed into creating genuinely affordable and public housing. To do that, negative gearing and tax concessions need to end.
If you agree, become a Green Left supporter and join the campaign to make housing a human right.