1 minute read
NRAS RENTERS FACE RISING RENTS AS AFFORDABLE RENTAL SCHE ME WINDS DOWN
by remagazines
Thousands of low-income renters are facing burgeoning rents as the National Rental Affordability Scheme (NRAS) winds up.
Even with the Federal Government launching a suite of housing policies to tackle Australia’s housing crisis, it has been confirmed that the NRAS will not be extended and there are no current plans for any replacement schemes at this time.
Annual incentives have been provided to investors via the National Rental Affordability Scheme (NRAS) when the policy launched in 2008, to provide affordable rental dwellings at least 20 percent below market rates. The number of properties involved in the scheme was capped at 38000 in 2014, with the last subsidised properties set to exit the scheme in 2026, as the ten-year timeframe attached to the financial incentive concludes.
With current NRAS rents still set predominantly at pre-pandemic lows, the rental revenue yield gap will likely be significant for investors who do not exit the affordable housing system. With properties that are 10+ years old (a time, when maintenance liabilities often increase), combined with increasing costs and soaring interest rates, there will be limited motivation for investors to continue to provide discounted rents.
More than 6600 properties will be scrapped from the National Rental Affordability Scheme (NRAS) across Australia in 2023.
Victoria will lose 1356, whilst Queensland tops the countries losses at 2499, applying further pressure to a housing system under extreme stress.
Whilst new Government policies include the $10-billion Housing Australia Future Fund which will build 30,000 social and affordable housing properties nationally, building will be spread over a five-year period.
Renters having to vacate NRAS properties in the interim, will not have the immediate benefit that the AFF may provide.
