The COVID period has been a very uncertain one for renters. The various measures introduced by state governments to ensure renters did not get evicted have been welcome and, along with Jobseeker and Jobkeeper, have allowed renters to maintain their housing. Many stories have also emerged about lower rents and rising vacancies and the rising cost of negative gearing (now over $13B per annum).
National Shelter will have a better idea of what has happened to rental affordability as we prepare for the next Rental Affordability Index (RAI) but cheaper rents don’t necessarily mean more affordable rents. The importance of the RAI is measuring rents against incomes and with so many households now having their income impacted by COVID, affordability remains obscure until we do that comparison.
We also wish to observe that now would be a good time to look at the combined cost of Capital Gains Tax (CGT) exemptions to investors in the rental market. It is difficult to tackle CGT when gains are being made but as house prices are stagnant at best and predicted to fall it would be a good time to tackle the excessive generosity of Capital Gains Tax.
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