Rental Affordability

In reply to the Hon. R.A. SIMMS ().30 April 2024).

The Hon. K.J. MAHER (Minister for Aboriginal Affairs, Attorney-General, Minister for Industrial Relations and Public Sector): The Minister for Consumer and Business Affairs has advised:

The South Australian government committed to delivering a package of initiatives to respond to current housing challenges. These initiatives included a review of the Residential Tenancies Act 1995 (act) to modernise the act, strike the right balance between protecting both tenant and landlord interests, and address the issues of rental affordability.

As part of this review, the Residential Tenancies (Limit of Amount of Bond) Amendment Regulations 2023 and the Residential Tenancies (Protection of Prospective Tenants) Amendment Act 2023 came into operation on 1 April 2023 and 1 September 2023 respectively, as the government's immediate priorities.

This provides immediate protections for tenants by limiting most rental bonds to four-weeks' rent (previously six weeks) and effectively banning rent bidding. This sought to provide relief to tenants in the rental market, while the broader review of the Residential Tenancies Act 1995 (RTA) was completed.

On 1 March 2024, the government commenced the next phase of RTA changes by introducing rental reforms in the Residential Tenancies (Miscellaneous) Amendment Act 2023 (amendment act) that did not require supporting regulations or significant adjustments to industry or community practices. Tougher penalties for all offences commenced, as did the amendment to ensure rent cannot be increased more than once within a 12-month period.

The remaining provisions in the amendment act will commence on 1 July 2024 (with one exception). Some of the changes to be commenced include:

Requiring prescribed grounds to terminate or not renew a tenancy;

Extending the notice period to end a tenancy from 28 days to 60 days;

Allowing tenants to have pets in rental homes with reasonable conditions;

Ensuring rental properties comply with minimum housing standards;

Phasing in the need for replacement fixtures to meet energy and water saving standards;

Providing additional support for victims of domestic violence; and

Providing more protections for renters living in rooming houses.

This review presented opportunity for tenant and landlord representatives to discuss rent control measures. It was the overall view of those in attendance at the 2022 RTA forum that rent control measures are not a viable solution to rental affordability issues and are likely to cause an upsurge in rental prices.

Economists support this view, suggesting rent control disadvantages both landlords and tenants, and restrictions are likely to reduce incentive for investors, lead to disrepair of housing stock, reduce rental housing turnover, and exacerbate the mismatch between housing size and household size (particularly for vulnerable groups).

The South Australian government's housing package demonstrates commitment to increasing housing supply and providing affordable housing solutions, access, and support for South Australians. The government is in the process of delivering the first increase in public housing stock in a generation. By increasing public housing stock and affordable housing options, we are lessening demand for housing which will in turn benefit lower income households. To further ease stress in the private market, the SA Housing Authority are undertaking a range of initiatives with key partners.

The government's approach does not support the Greens' freeze on rents for a period of two years.