This week the media has been astir with proposals before the QLD government calling for rental caps
This week the media has been astir with proposals before the QLD government calling for rental caps to be instituted amidst a rental market in crisis where supply is (seemingly) non-existent and prices have gone up at their fastest rate in recent memory. This isn’t a new concept – The Greens have raised the idea before, but it is definitely a topic likely to see some fire on both sides.
At present, there are no caps on the amount by which a landlord can increase the rent on their rental property, either for a new lease or in an existing lease with provision for increases. This is the case for all states in Australia with the exception of the ACT, where legislation limits increases to CPI+10%.
Tenants do have recourse where they feel that the increase is excessive (not in-line with market) or retaliatory i.e. the rent increase is in retaliation to tenant behaviour, complaints etc. Its worth noting here that in a quickly rising market, increases can FEEL excessive (and look, an increase of $100 per week can be difficult to come to terms with) but if comparable properties are being offered at that (new rate) then it would be hard to dispute. Tenants can negotiate against a proposed rental increase, though in this market again, it will very much be up to the owner.
One cap that IS in place in Queensland is how often rent can be increased – being no more than once every 6 months under a periodic lease or fixed term lease with specific provision. An example of the latter might be a 2 year lease (they do exist!) where the tenant gets the security of a longer tenure, and the owner gets the benefit of having their rent remain relevant to market with increases rather than have rent potentially behind the times.
Worth noting that if your lease is up and you are signing a new lease at an increased amount, this is NOT an increase on an existing rent, but a whole new agreement that stands separate from what has gone before – it’s not actually a lease renewal, but its own discrete agreement.
In a crisis, people will turn to just about anything for a solution, but when it comes to our current situation with rentals there is only one real answer – and that’s creating new supply. We can’t build new homes overnight, but government policy can go a long way towards creating the right mechanisms to support new, affordable development, and put more roofs over people’s heads.