Could rent limits be the answer to the rental crisis?

The Queensland government is considering introducing a limit on rent increases amid soaring housing stress across the state.

It follows calls by housing advocates for something to be done about a growing number of tenants forced out of their homes due to price hikes.

Across Queensland rents have been rising, with the latest CoreLogic data showing Brisbane rents growing at a faster annual pace than the other capital cities over the last 12 months at 13.4%.

Queensland premier Annastacia Palaszczuk says a new report showed the extent of the crisis showed the extent of the housing crisis.

According to the report, median rents rose 80% in the central Queensland city of Gladstone, 51% in Noosa and 33% on the Gold Coast over the past five years.

During that time, the proportion of private rentals considered affordable for low-income households halved from 26% to 13%.

"I understand that this is a big issue for families, they are constantly being faced with huge increases in rent," says Palaszczuk.

"We're looking very seriously at how a rental cap can be put in place."

The chief executive of the Queensland Council of Social Service Aimee McVeigh, who commissioned the report, says the government needs to act immediately.

"It's vital that a limit on rental increases is considered, given the extraordinary pressure Queenslanders are currently under. More and more Queenslanders are being forced out of their homes, as a result of skyrocketing rents," McVeigh says.

Tenant Queensland's chief executive Penny Carr says that the proposals put forward aren't radical and are already in place in ACT.

In the ACT, landlords must calculate changes in the CPI between rental leases and can then add up to 10% of that number to come with a prescribed amount.

"It's a very moderate proposal that allows rents to be increased over time, but it smooths them out to prevent shock," she says.

Carr says landlords already enjoy a similar mechanism when it comes to land tax so why not apply a similar theory to renters.

"What this proposal does is makes rent more stable for people and puts a step in to determine what is a justified increase and if the landlord wants to go above that they can go in front of a tribunal," she says.

Carr is backed by the chief executive officer of the Tenant's Union of NSW Leo Patterson Ross who says he hears about rent struggles from many people across the state.

"The introduction of fairer limits on rent increases as well as a more effective way to challenge rent increases is needed to help ease this immense pressure," he says.

Ross says he encourages all governments to look at what can be done to address the nationwide problem.

"Solutions needs to be both long and short term, so if legislated rent caps were to be introduced in NSW it should be done alongside clear targets for the development of genuinely affordable housing and ensuring supply meets population needs," he says.

However, the proposal was dismissed by the chief executive of the Real Estate Institute of Queensland, Antonia Mercorella, saying it was dangerous to put rent controls on the table.

"In the middle of a housing crisis caused by lack of housing supply, it's beyond belief that the Government is now proposing a measure which innately discourages further supply," says Mercorella.

"No one denies that there is an immense amount of pressure for the most vulnerable in our community, but rent control or freezes are not the answer."

Financial and housing market expert Pete Wargent from BuyersBuyers says that rent caps are a band-aid solution to the rental problem.

"As a short-term fix it could work to some extent but over time it will reduce investors in the state which could impact supply," he says.

There's been no end of changes for property investors over the last five years, including the scrapped land tax changes and Wargent says it does make it difficult for investors to decide.

"Every state and territory have different rules and introducing a cap like this does put the state at a comparative disadvantage," he says.

Ray White's chief economist Nerida Conisbee agrees, saying that rent control is a short-term solution that leads to long-term pain.

"Capping the return on housing makes it less attractive as an investment option and would lead to other investments becoming more attractive.

"Fewer rental properties that are more rundown is the outcome and this flows through to desirability of suburbs where rent control is in place," says Conisbee.

It's not the first time the issue has been raised in Queensland, with a bill introduced to the parliament last year calling for rents to be frozen for two years.

The bill, which did not pass through the house, was introduced by Greens MP Amy MacMahon who says she welcomes the news from the Palaszczuk government.

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