BREAKING NEWS: The introduction of prefabricated and build-to-rent houses has the potential to reduce rental costs.

The rental vacancy rate in Australia has reached a historic low, nearly hitting zero, with estimates ranging from 1.1% to 0.7%. Consequently, rental prices have surged, increasing by 7.3% throughout 2023, driven by a surge in demand and a decline in new property supply.

Efforts to address the housing crisis through tax concessions and rent assistance are unlikely to have a significant impact on reducing rents. While proposals to wind back capital gains tax concessions and limit negative gearing may deter some landlords, they are unlikely to increase rental supply substantially. Similarly, while increasing rent assistance may alleviate financial strain for some renters, it does not address the underlying issue of housing supply.

To address the housing shortage, initiatives focusing on increasing housing stock, such as the Housing Australia Future Fund and agreements to deliver new social and affordable homes, are crucial. Encouraging build-to-rent developments and prefabricated housing could also help alleviate the housing shortage, provided skilled labor availability is addressed through measures such as apprenticeship support and prioritized migration of tradespeople.