Australia is in a housing crisis and any reform to ease the pressure – big or small – is welcome.
Five months after the state election, NSW Labor has unveiled a new policy to help tenants transfer their bond directly to new premises. It will also tighten eviction rules if it gains control of Macquarie Street. The Herald supports Labor’s proposals as sensible measures to alleviate cost of living pressures for the 30 per cent of NSW residents who rent their properties.
Nicola Powell, the domain’s head of research and economics, has explained that a national housing crisis will worsen next year as international students and migrant workers return to Australia in greater numbers. Not only will more housing be needed for newcomers, but the pressure on the limited supply of social and more affordable housing for our most vulnerable people will also increase.
Tenants are already dealing with a tough rental market in Australia. The national vacancy rate has almost halved, from 1.5 percent in October 2021 to 0.8 percent last month. According to Domain’s latest figures, the rate fell to a record 1 percent in Sydney, which is below the 3 percent rate required for a balanced market.
The average rent for a house in Sydney has also risen from $570 to $650 since September last year. Unit rents have also risen from $480 to $550 over the same period.
Labor’s portable bond plan – to let the Rental Bond Board transfer a deposit directly from one property to another – makes sense to prevent tenants from scrambling for cash to secure a new property. . Landlords would also be required to provide reasonable grounds to terminate a lease, to protect tenants from eviction if, for example, they complained about the magnitude of rent increases or tried to enforce their contractual rights.
Labor chief Chris Minns says that although legislation was introduced in 2018 to allow transferring bonds between properties, tenants still face an initial cost of thousands of dollars to secure a home. Under his proposal, a new landlord would receive a certificate from the NSW Rental Bond Board that would hold the rental deposit paid for a previous property for a second. The board would manage the payment of any difference in costs and property damage claims.
The NSW Tenants’ Union supports the proposal, citing a similar scheme already in place in Queensland. The organization is concerned that people in financial difficulties are vulnerable to falling prey to loan sharks who provide high-interest loans to pay off a second bond.
The UK has long had a bond transfer scheme in place, making it hard to understand why it took so long for the system to be considered here. Both sides of politics need to develop more policies for tenants in the run-up to the March state elections.