Mr Jee Chin, principal of First National JM Chase, says government needs to do more to support renters and provide better assistance than is currently offered through the National Rental Affordability Scheme (NRAS).
“While we support NRAS, it is no longer enough in its existing form, to meet rising rents, leaving those most in need of assistance flailing in their efforts to make ends meet,” Mr Chin said.
“It could soon be the case that with falling house prices, lower interest rates and reduced consumer confidence, purchasing a home will make more economic sense for those doing it tough, where the monthly mortgage is not too far off what they are paying for rent.”
According to Jee Chin, evidence of improving housing affordability can be garnered through recent home value index results.
“Home values recently posted the best results in seven months and the recent cuts to interest rates, along with talk there may be even further drops, is resulting in NRAS losing some of its validity as an assistance package, especially for those who are finding it difficult to come up with the rent each week or month,” Mr Chin said.
“What the government needs to do is look at changing NRAS so it has more relevance and achieves what it set out to do, or consider other forms of assistance such as bringing back some of the grants and other incentives that were obviously phased out too soon.”
Mr Chin said that, although it is good news for the property market that home buyer activity is increasing as a result of the market conditions, it is not good when it is done at the expense of those renters who can least afford it.
“It is always encouraging to hear that more people are realising their dreams of home ownership, but there also exists the reality that there are those in our community who are forced into rental accommodation and can ill afford to fall behind in any way at all in keeping pace with rental increases,” Jee Chin said.
“In these situations, they need access to assistance schemes that meet their circumstances and offer real assistance, which NRAS initially did, but has since failed to recognise the growing demand of assistance required, making it virtually obsolete.
“We don’t see property market conditions altering too dramatically in the near future, and certainly not to the extent that they will improve the situation for struggling renters.”
