Okay, now, but perhaps not so good later.
Okay, now, but perhaps not so good later.
The Federal Government secured a compromise with the Greens so they could pass their $10 billion Social Housing Fund.
Now, if you haven’t been putting in the effort to understand what that really means, and I don’t blame you, let me quickly explain.
The Government isn’t going to spend $10 billion on housing.
They are going to invest $10 billion into the future fund.
The future fund has to earn a profit on that money, and it’s that profit that will go towards building housing.
In the last five years, the Future Fund has returned 7.8%, so at that rate, it would take about 12-13 years before $10 billion on housing was actually.
So, the Government announcement might better be reworded as
We will spend $780 million a year on social housing, maybe.
It just depends on how much our investments return, last year wasn’t great, we lost money but still, what’s an announcement without spin.
If I convert that back into actual properties, that’s about 800 houses a year. Australia needs over 150,000 new houses yearly to keep up with population growth.
I can’t help thinking that the $10 Billion social housing initiative is a far better headline than a plan!
What’s more interesting to me, and should be food for thought for our landlords, is that this bill passing will probably lessen the airtime the Greens have been receiving with their calls for rent caps and rent freezes. But not hearing them in general media isn’t the same thing as them going quiet.
The call for rent increase caps and freezes has one keen voter group listening: renters.
No surprise there. One survey suggested 75% of all voters think there should be some limit on rent increases. While rent stress continues, so will that idea, and the Greens are seen as the only ones saying they can do something about it.
Several federal and state Labor seats have renters make up a considerable portion of their primary voters. Tanya Plibersek has more renters as voters in her seat than any other group. In NSW, the top 5 state seats with the highest rent stress levels are Labor seats.
The Greens will keep pursuing the argument because they want more renters to vote Green rather than Labor. That could make Labor members more agreeable to further tenancy law changes. Tenancy is the NSW State Government’s responsibility. The possibility of their Rent Commissioner following the ACT government and capping rent increases is entirely possible.
We should have at least two more years of rent increases before the market settles down. Those increases won’t be as large as we have had but they will still be felt.
The next NSW election is about three and a half years away, so maybe everyone might have moved on before then. Or not. They brought in the rule of only one rent increase a year when rents were going backwards.
My industry didn’t fight the change instead saying, ‘We can’t imagine a time in the future when more than one increase a year could ever be necessary.’
Sometimes I think we really are all caught up in an episode of Utopia.
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Author: Stephen Jackson