Whether you’re a homeowner, renter, or landlord, the current rental affordability crisis will be of no news to you. However, what may surprise you, is the proposal by a minor political party to enforce a two-year rent freeze and place a ban on no-grounds evictions.
We discuss what the rental freeze may mean for property investors below.
Why is a rent freeze being proposed by the Greens party?
It only takes a quick glance at research by the Parliamentary Library to grasp why the Greens Party is proposing a rent freeze. The average Australian renter is paying almost $5,000 more for their home than in December 2021.
Rental affordability across our states and territories means that families are struggling to afford the same house they may have been living in for years. Not only that, but the number of available rental properties remains at a historic low. With inflation rising almost 7% in the twelve months to October 2022, it’s little wonder that many renters are struggling to keep a roof over their heads.
The Greens party intends to propose a two-year rent freeze during talks with Australia’s Prime Minister, Anthony Albanese. The minor political party believes that a rent freeze would have collectively saved tenants $10.7 billion over the past year.
While the freeze is socially-focused, there are also flow-on impacts to landlords and property investors who use rental income to support their own families.
What would a rent freeze mean for property investors?
Similar to the emergency rent freeze in Victoria during the height of the pandemic, a rent freeze would effectively see the landlord’s rental income halt for up to two years or forbid increases to the rent for the same period. Unfortunately, for the property owners, inflation and the cost of property acquisition and ownership would still continue to rise, thanks to rising interest rates and the cost of materials continuing to remain high after COVID.
While property investors may be well-intentioned in their objectives to create supply in an undersupplied rental market, the costs of property ownership under the prospect of a rental freeze could deter some residential property investors.
Specialist Disability Accommodation investment vs traditional property investment
Assessing all available investment options should always be paramount before financially committing to any investment. Particularly for investors looking to positively impact their community, it pays to consider whether traditional property investment will continue to meet their financial and ethical objectives.
NDIS property investment is becoming more prevalent in the investment community, as the market for SDA properties is largely uncorrelated to the residential market. Housing Minister Julie Collins recently announced that in NSW alone, there is a new $20 million commitment to fund multiple disability housing projects.
The benefits of investing in SDA properties
- The federal government is allocating $700 million per year towards the SDA program within NDIS participants’ NDIS plans to ensure they can access suitable housing. This means that the income from SDA housing is essentially government-backed.
- SDA properties are often approved to house multiple tenants, each with their own level of funding and paying a reasonable rent contribution from their disability support pension.
- Approved SDA housing often becomes a forever home for the tenants who occupy them, as they are purpose-built to meet the needs of Australians with extreme functional impairment or very high support needs.
- The National Disability Insurance Scheme (NDIS) has bi-partisan support, meaning that the SDA program’s funding will continue regardless of which major political party is in power.
Discuss your NDIS property investment goals with Apollo Investment
As specialists in NDIS property investment, we pride ourselves on offering a complete end-to-end investment solution for investors looking to make an ethical investment choice. Our commitment to helping provide an SDA home for an Australian living with disability is matched by our commitment to investors, creating NDIS properties that provide 10-15% pa yield.
We keep our focus on tenancy longevity and ensure that your NDIS investment property is placed for maximum capital growth.
If you’d like to learn more about the benefits of investing in an NDIS SDA property over a standard investment property, then chat with our team. We can assess your eligibility and work with you to diversify your property portfolio with an ethical investment backed by the Australian government.