Bills

Residential Tenancies (Rent Freeze) Amendment Bill

Second Reading

Adjourned debate on second reading.

(Continued from 1 May 2024.)

The Hon. R.A. SIMMS (19:46): Rent rises in Adelaide are out of control. According to real estate platform Domain, the Adelaide rental market experienced the largest quarterly change to the weekly median rents in the country during the first quarter of 2024, with rents for houses rising 5.4 per cent. Rents in Adelaide are rising twice as fast as wages. According to the Australian Bureau of Statistics, the wage price index for SA rose 3.5 per cent in 2024, while rents shot up a whopping 10 per cent. In 2025, this trend has continued. Adelaide rents went up by 10 per cent on average last year, while wages grew at only 4 per cent. How are people supposed to keep a roof over their heads, let alone save for a home, when their rent is going up at twice the rate of wages year after year?

Housing in South Australia used to be affordable. Indeed, before the pandemic, SA used to be the second most affordable state to rent in in the country, but according to data from the REA Group and PropTrack, SA is now facing the toughest rental affordability crisis in the country, along with New South Wales. SA rental affordability is at its lowest level since at least 2008 when these records began. Relative to March 2020, rents in Adelaide have surged by a whopping 55 per cent.

In March 2024, PropTrack reported that SA rent prices soared by 10 to 30 per cent across 92 suburbs in just one year. From 2020 to 2024, the weekly median rent in Adelaide increased by a staggering 54 per cent. That is an increase from $375 per week to $577 per week. That is a $202 rent rise. In the same period, the official cash rate rose from 0.25 per cent to 4.35 per cent, a 4.1 per cent rise in the interest rate versus a 54 per cent rise in the weekly median rent. It is evident that landlords are more than just passing on the cost of interest rate rises to their tenants; there are some who are price gouging them.

We are in the midst of the worst housing crisis in generations. It is clear that tenants are at the mercy of the market and that that is simply not working. The skyrocketing costs mean that many tenants are forced to choose between buying food and facing eviction. It is morally wrong that we have more and more South Australians being plunged into poverty and homelessness while some landlords rake in record profits. In a developed country like Australia and in a state like ours, this is simply unacceptable.

Meanwhile, according to a Shelter SA report, the practice of rent bidding is still prevalent in South Australia, and that is despite changes to the Residential Tenancies Act that were enacted last year. Indeed, at the time the Greens moved amendments to that legislation to try to make it very clear that the situation of asking for a higher price was not just prohibited in South Australia but that accepting a price above the asking would also be prohibited, but again the Labor Party opposed that.

South Australians are horrified by the rent prices that they are seeing at the moment and they want to see their parliament finally take some action. We have a moral imperative to intervene in the market to provide renters with some reprieve from skyrocketing prices and insert some fairness back into our housing market. The bill that I speak to today seeks to do just that.

Under this bill, landlords will be prevented from increasing residential rent for a two-year period. After that period of two years, rent would only be allowed to increase in line with inflation. Tenants would be able to apply to the rental tribunal for a declaration of the maximum rent payable on a premises. Should a landlord be found to be charging more than the maximum rent payable as determined by the tribunal, they may be liable to reimburse their tenant the excess rent charged.

Under the bill, the maximum rent payable on a residential property during the two-year rent freeze would be the rent included in any residential tenancy agreement as of 1 January 2024. If the property was not the subject of a residential tenancies agreement at that time, it would be determined on factors including the most recent rent under a previous tenancy agreement entered after January 2023.

Rent freezes are not an extraordinary or novel idea. Indeed, South Australia froze rents for six months during the COVID-19 pandemic. I do recognise the leadership of the Marshall government in that regard, and in particular note my colleague the Hon. Michelle Lensink for her leadership in dealing with the pandemic and in managing vulnerable people who were experiencing homelessness at that time. I think that would have been a very challenging issue for the government to deal with and the honourable member dealt with that with great compassion and foresight, so I commend her for that.

Historically, rent freezes have been used in times of rampant inflation. In 1941, the federal government froze rents to deal with inflation caused by wartime shortages. Throughout the world, rent controls are used to protect tenants from punitive and excessive increases in rent pressure zones. From New York and California to Scotland and Ireland, action has been taken to limit increases in rents.

Indeed, Lord Mayor Sadiq Khan has called for powers to freeze rents for two years in London. The New Zealand Human Rights Commission has also called for a temporary rent freeze throughout the country to tackle the cost of living and rent crises. More recently, Spain has capped their rent increases in areas where rent is increasing significantly.

This bill is proposing real action for renters in a time of an unprecedented housing crisis. It is possible. This is not a fanciful idea. Over the last three decades of neoliberal economic policy, the role of government in housing has consistently been replaced by the private market, the real estate industry and other large-scale financial actors. Successive Liberal and Labor governments have been more interested in ensuring that the big banks, wealthy investors and property developers continue to rake in record profits at the expense of everyday people.

I recognise that this bill would not be a panacea, and we need to see action from the federal government as well. In particular, the Greens urge the Albanese government to finally take action on negative gearing and capital gains concessions that benefit wealthy landlords, but we can also take leadership here at a state level. This bill, which would freeze rents for two years and cap future increases in line with inflation, will put more money in the pockets of renters who are struggling in the middle of this financial crisis.

The Malinauskas government is going to be handing down its budget tomorrow. There is an opportunity for them to show some real leadership when it comes to supporting renters who are struggling. I suspect, unfortunately, that once again renters will be dudded by the Malinauskas government's budget, but I urge the government to take some action. I want to indicate to members that I plan to bring this bill to a vote next sitting so that all members of the community will get to see where their members of parliament stand on this important question.

This bill would reverse the trend of skyrocketing rents by putting the interests of renters ahead of the big banks, developers and property moguls. Everyone needs a home. It is a fundamental right of each and every South Australian to have a roof over their head and a place to call home. Housing should be treated as a home and as a social good, not a speculative financial interest. People should not have to feel extremely lucky simply to have a roof over their head in this great state of ours. With that, I conclude my remarks.

Debate adjourned on motion of Hon. I.K. Hunter.