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RUBY:

From Schwartz Media, I’m Ruby Jones, this is 7am.

Across the country - rents are going up.

But it’s not because the value of properties has risen, in fact values are largely going down.

Instead it has to do with the mortgage repayments of landlords, and the fact there’s not enough supply of rental properties at the moment.

What it means is that rental stress in Australia is at crisis point, with mental health and homelessness services raising the alarm.

Today, senior reporter for The Saturday Paper Rick Morton on what’s happening to our rents.
It’s Wednesday, September 14.

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RUBY:

Rick, if you're renting your home at the moment, you've probably started to notice that the cost of doing that is going up. So what are we looking at here? How much are rents going up by and why are they going up?

RICK:

Mine's just going up $15 a week in Sydney. And you know, I think we need to go back to mortgage repayments here. They're going up because - we all know I think - now that the RBA has been lifting interest rates since May and to counter that landlords across the country, and there are a lot of landlords across the country, are passing those rises directly onto the renters and the tenants in their properties. So according to CoreLogic, rents are about 9% higher across the capital cities and there are, you know, 11% in regional areas compared with June last year. So if you're paying $300 a week, you could be seeing your rent rise almost $30, and we've seen extreme cases that have been worse than that, or even cases where landlords have been trying to kick out entire blocks of units to turn them into AirBnBs to recoup costs. And this could all get a lot worse soon because rates are going to keep going up for the time being, at least for the foreseeable future.

And interestingly, at the same time that all of this is happening, the Productivity Commission has just finished looking into the situation renters and public housing tenants and the homeless are facing with housing in Australia, particularly this review they've just finished of the National Housing and Homelessness Agreement.

And one submission to this review struck me as being really important in the way that it described the situation facing so many renters at this moment. And it was made by a homelessness support service in Adelaide.

RUBY:

Okay, so tell me about what this submission said, what this homeless support service in Adelaide has to say about the situation facing people at the moment.

RICK:

Yeah, so they were really blunt and they said in view of the large increase in the cost of housing in the last year, even more people are having to resign themselves to a life of renting and to compound their problems, rental vacancies have decreased while rent has gone up, resulting sometimes in bidding wars between people desperate to secure somewhere to live. They went on to say people who have otherwise been able to live a reasonable working class life until recently are now having to live in their vans and cars. And we've seen this right across the country, especially after natural disasters.
Now, the context of this submission is that we're seeing record lows in vacancies of rental properties. So it's harder and harder for renters, particularly those at the lower income end, to find a place to live if their landlord does jack up the price. And of course, that does affect those people at the bottom of the market. It increases competition among the people with the least capacity to compete. And this homelessness service in Adelaide had a pretty worrying warning about, you know, what all of this means and they said eventually this vicious spiral will lead to social unrest.

RUBY:

Okay, so what's happening then is the cost of renting is actually becoming prohibitive. People can't afford housing, so they're increasingly having to do things like live in their cars. And it sounds like this service is worried not only about these people, but about the broader implications of this anger or the unrest that could flow on from this situation. It's a pretty stark warning, isn't it?

RICK:

Yeah, it is a stark warning. And you don't usually see language like this in submissions to Productivity Commission reports, even if people are being blunt about, you know, the effects of social or economic policy. This is serious stuff because we've let serious things happen for a really long time in this country and that's exactly what this homelessness service in Adelaide is pointing out. In fact, when this service is actually talking about all of these problems and the squeeze being put on renters, they're alluding to several intersecting crises in Australia.

We've got the pandemic that has seen a lot of people realise that you can actually work from home if you're in a professional job. And so they've moved to regions where, you know, life is a bit better.

Archival tape -- Reporter:

“New figures have revealed the increasing popularity of regional Australia with more people than ever choosing to move there or stay there. The Australian Bureau of Statistics says a net 43,000 people traded capital cities for the regions last year.”

RICK:

Property prices relative to the capital cities are cheaper, but of course that's displacing a lot of people, particularly single parent families in regional areas who have been previously able to afford to live there, who are increasingly saying that they cannot.

Archival tape -- Reporter:

“Lockdown weary Melbourne lost 26,000 people in net terms, the largest drop on record.”

RICK:

The floods in northern New South Wales which have literally wiped out thousands of homes in Lismore.

Archival tape -- Reporter:

“Tomorrow marks six months since a wall of water flooded Lismore in the dark of night. Most residents are still recovering from the trauma and many are still without a home.”

Archival tape -- Reporter:

“Community advocates say homelessness here has been a problem long before the floods. A lack of affordable housing, as well as the lack of public housing has meant this has been a problem for several years. The floods have only made it worse.”

RICK:

Because of climate change we've got other homes in fact, you know, about 100,000 I think across northern Australia that are uninsurable or people cannot afford to get insurance for them, which again putting up prices.

Archival tape -- Lismore resident:

"We are homeless. We were homeless for three months until I finally managed to convince someone to give me a chance. And I was paying a ridiculous rate of rent that left me you know, on the poverty line because it was so high. And now I just can't see a way forward."

RICK:

So we've got these kind of intersecting crises that all serve to put limits on or kind of contort the housing market. So it's this bulbous, hideous thing that serves only the most wealthy.

RUBY:

We'll be back in a moment

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RUBY:

Rick, we've been talking about the housing market, and how it’s become something that serves only the most wealthy. But what about those on the other end of the spectrum, the ones with the least money. What are the consequences to being locked out of the housing market?

RICK:

Yeah. I mean, people talk about public policy or social policy, but as 'social' means people essentially, it's like it always comes back to how this affects people. And it's really important, I think, sometimes to remind people who aren’t in these situations what actually happens. And housing stress is so fundamental because of the way our system has been built up to people's mental wellbeing. And on Tuesday last week, actually, Suicide Prevention Australia released a report about the major drivers of elevated stress that is beyond normal stress levels in the past year. Now 40% of people in that survey, a thousand nationally representative weighted respondents, 40% said that the cost of living in personal debt is the single biggest factor in the elevated stress levels.

Now when asked what would be the biggest contributing risk to increased suicide levels over the next year, they were resolute.

They said housing affordability and cost of living debt have substantially increased as a risk factor since 2021, last year.
And they are now two of the top three suicide risk factors in this report.

In fact, Anthony Albanese, the Prime Minister, was at the launch of that report last week at Parliament House and he was grilled a bit on whether the Government was doing enough to solve these problems.

RUBY:

Right. Okay. And so what did he say then? What did Anthony Albanese say when he was asked about this report? And does it seem to you like he or the government that he leads is taking these issues seriously?

RICK:

He certainly said some of the right things. And there are some things that this government is doing that are welcome changes. And, you know, he pointed to some existing policy or some existing commitments like Labor's submission to raise the minimum wage, which was agreed to by the Fair Work Commission back in May. That's like more than 5%, which is an enormous increase. He also pointed to the fact, and these are his words, “that's why we ensured that pension increases and increases for those in Social Security have occurred this month. We understand the pressures that people are under and we wanted to undertake measures that alleviate cost of living pressures.”

Now that really annoyed me because he wasn't being honest on the matter of Social Security payments.

Pensions and payments did rise by their largest jump kind of in three decades, but not because Labor made it happen, not because they changed the payment rates. These are six monthly indexation adjustments. They're legislated. They happen regardless of who is in power and they have been happening since the Social Security Act was legislated. So Labor did nothing to increase those beyond inflation and the only reason they're that high is because of inflation, which means the cost of living has gone up. So it's not going to change the status quo, and they know that.

RUBY:

And it's disingenuous to suggest that it will.

RICK:

It’s completely disingenuous. And I would argue, you know, if you can't lift those rates, that's one thing. But if you then turn around and pretend that you're doing something about it, when you know full well that you're not, that's cruel.

RUBY:

Right and this situation - it isn’t something that has happened overnight is it? It’s the result of decade or more of government policy. And the Albanese government came to power without any plans to change any of that big picture policy, things that would actually make a difference like changing negative gearing or getting rid of capital gains. So what is on the table now under the Albanese government, and will it be enough?

RICK:

All of this stuff has been affected by the failure to act over decades now, but particularly more recently on negative gearing and capital gains tax and these housing supply levers and demand levers that federal government has. It is almost breathtaking, quite literally, just to go through the list because there's been no movement on any of these kind of hugely transformative housing policy changes, such as getting rid of the negative gearing tax breaks, or the capital gains tax reform, both of which were options that Bill Shorten, when he was Opposition Leader, took to the 2019 election. Of course that's why, partly, Albanese, Anthony Albanese, doesn't want to mention them because they were powerfully rejected by the electorate apparently.

Labor has done some things that promise something. So there is this $10 billion Housing Australia Future Fund, which is essentially an investment fund, the returns of which Labor has promised or says that this will fund 30,000 new social and affordable homes in the first five years. Again, a drop in the ocean compared to that waitlist. In fact, the Victorian Big Build, the $5.3 billion that will cover just 10% of what Victoria needs to cover its gap.

But all of these things that kind of the targeted support that will help some people, but they won't change the system in this country of housing. And what we have seen categorically is that it is a chain.

If you squeeze out home owners or potential homeowners at the top, they become renters. And renters, when rents go up, become even more squeezed and they move around to find rents that they can afford, which squeeze out low income people who can't even afford the rents in those areas. And then those people who don't have social housing or emergency housing or anywhere to go become homeless.

We have fundamentally failed housing in this country, and we're now in a crisis because of it.

RUBY:

Rick, thank you so much for your time.

RICK:

Thanks, Ruby.

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RUBY:

Also in the news today,

Ben Roberts-Smith, the controversial former Australian soldier, plans to attend official commemorations for Queen Elizabeth The Second in London.

As a recipient of the Victorian Cross medal, Australia’s highest military honour, Roberts-Smith was invited to the memorial as a matter of protocol – but he will attend under a cloud of doubt.

Roberts-Smith is currently awaiting judgement in a high-profile court case in which he claimed several Australian news outlets wrongly portrayed him as a war criminal and murderer.

And...

Uncle Jack Charles, the Indigenous performer and activist, has died aged 79.

The survivor of the Stolen Generations turned trauma into art, and is being remembered as a beloved mentor and leader.

I’m Ruby Jones, this is 7am. See you tomorrow.

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