Homelessness Crisis in Queensland Reaches Unprecedented Levels Amid Sharp Decline in Building Approvals

The homelessness crisis in Queensland has reached its most severe level since the Great Depression, and unfortunately, the situation is anticipated to deteriorate further.

Recently released figures from the Australian Bureau of Statistics (ABS) indicate a significant 26 per cent decline in residential building approvals in Queensland during August 2023. Kevin Young, the President of Property Club, Australia’s largest independent property group, expressed deep concern over the exacerbation of the homeless crisis in the state due to this decline.

Mr. Young, an experienced investor in the Queensland property market for over five decades, emphasized that the rental situation in the state has reached an unprecedented level of severity. He highlighted the dire impact of the drastic drop in residential building approvals, particularly in the context of rental availability and affordability.

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The ABS figures for August revealed that Queensland saw the most substantial decrease in new residential building approvals among all states and territories in Australia. Consequently, tenants in Queensland are already grappling with exorbitant annual rental growth rates, and the scarcity of rental properties is poised to worsen, leading to a significant surge in homelessness.

The escalating rental costs have become a central concern in the overall cost-of-living crisis, especially for lower-income families across the nation. During a recent address to the Senate Committee regarding the cost-of-living crisis on September 28, Mr. Young issued a warning that rents could surge by 20 per cent in the upcoming year due to the acute shortage of rental properties.

The homelessness crisis in Queensland has reached its most severe level since the Great Depression, and unfortunately, the situation is anticipated to deteriorate further.

In response to the crisis, Property Club proposed a viable solution to the Senate Committee, emphasizing that it incurs no cost to the government. The proposal advocated for a substantial increase in the supply of second-hand rental properties, an initiative that could swiftly augment the availability of affordable rental units.

Property Club, with a considerable base of property investors in Queensland, highlighted their readiness to purchase these properties if previous tax incentives were reintroduced. Specifically, they urged the reinstatement of tax depreciation benefits for second-hand properties, a measure that could make renting more affordable for tenants.

The removal of tax depreciation benefits for second-hand properties in 2017 had inadvertently driven investors to primarily acquire new properties, which are costlier for tenants to rent. Consequently, this policy shift has contributed significantly to the current shortage of affordable rental properties in Queensland and across Australia.

To alleviate the crisis, Property Club also proposed the elimination of time limits on investor interest-only loans, which were imposed by APRA in 2015. This move has caused a substantial exodus of property investors from the real estate market, exacerbating the rental crisis to an extent unprecedented in recent memory.

Addressing this issue is imperative to safeguard the well-being of communities, particularly those facing the brunt of this escalating housing crisis.

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