Vacant property owners will be offered $5000 to make their empty homes available for rent as part of a new government program.
Announced earlier this week by the Western Australian Government, the Vacant Property Rental Incentive Scheme will allow empty homeowners to cash in on properties that have been left vacant for at least six months.
According to the Australian Bureau of Statistics, up to 136,000 dwellings could be sitting unused across Australia despite record-high rents and demand, with property experts calling for more to be done to bring vacant properties onto the market.
Perth rental availability nation’s worst
With the nation in the midst of an ongoing housing crisis, the proposal aims to boost the state’s dire rental vacancy rate which recently hit a record low of 0.4 per cent in Perth.
The state average doesn’t fare much better, with the second lowest vacancy rate nationwide at just 1.18 per cent, with market research group SuburbTrends giving WA the highest rental pain index score of anywhere in the country.
The low vacancy rates have led average rents to skyrocket across WA, with a significant 16.24% increase in rental prices over the past year, with rents in some suburbs reaching 46 per cent of the average weekly salary.
Scheme to boost long term rentals
Real Estate Institute of Western Australia (REIWA) CEO Cath Hart says the new scheme should be able to free up some rental properties for struggling renters.
“We’ve seen the success of the Short-Term Rental Accommodation (STRA) Incentive Scheme, which has provided rental homes for 150 households so far, and we expect this new incentive to encourage some vacant property owners to make their homes available as much-needed long-term rentals,” Ms Hart said.
“With the vacancy rate at a record low of just 0.4 per cent and listings for rent sitting at around 2,000, any initiatives that will put a roof over more people’s heads are very welcome.
Financial rewards are not the only incentive policymakers consider to provide some rental relief, with calls for additional taxes or vacancy fees on unoccupied properties.
But Ms Hart says this would be ineffective and unjust.
“We appreciate that the Government hasn’t taken a punitive approach to this issue as not all vacant properties can be transitioned to the long-term rental market; for example, they may be undergoing redevelopment or renovation, so punitive measures such as taxes or vacancy fees would be unfair,” she said.
Despite the scheme’s warm reception, the $5 million plan won’t be available to all Western Australians with an unoccupied property.
Additional qualification requirements include owners providing a minimum 12-month lease agreement to new long-term tenants.
Meanwhile, eligibility only includes single self-contained properties fitted with a kitchen, bathroom and toilet and does not extend to spare rooms or ancillary buildings, like granny flats.
The scheme is only open to homes unoccupied for a minimum of six months as of May 7th this year, and in the case of a break lease, owners will only have six weeks to re-let the property or be forced to pay back the bonus.
In addition to this new incentive, the government has extended the STRA scheme applications, which ended yesterday, to November later this year.
“Housing supply is the greatest challenge facing the market at the moment, and in assessing housing policy, the big question is whether it will increase the number of homes that can be built, bought or rented,” Ms Hart said.
“We acknowledge the extensive measures the Government is using to address all aspects of boosting housing supply, from this new initiative and the extension of the short-stay scheme to the additional investment in social housing and building and construction apprenticeship and training opportunities.”
Experts call for more incentives
SuburbTrends founder Kent Lardner says financial incentives would be crucial in helping to solve the state’s rental crisis.
“Our immediate focus must be on implementing emergency accommodations and creating incentives for homeowners to offer underutilised properties for rent.
These measures are crucial stopgaps that can provide some relief in the short term,” he said.
“To address the twin challenges of availability and suitability, we propose tax incentives or financial benefits for homeowners to bring under-occupied houses into the rental market.”
“This approach not only maximises the use of existing housing stock but also alleviates some pressure from the rental market.”
