Renters matched with affordable leases through ACT program

Private rents have become so competitive in Canberra that an individual earning as much as $90,000 a year may find themselves requiring housing assistance to secure a lease.

YWCA Canberra chief executive Frances Crimmins says this is the sad reality for people who are actively reaching out to the organisation’s Rentwell program, a charitable property management service for affordable, privately owned ACT rental properties.

“We get a lot of applications from single parents, older women or young professionals starting their first graduate job,” she says.

“They may be earning somewhere between $50,000 and $90,000 per year but still find it challenging to afford to rent in Canberra’s private market.”

Rentwell, which leases properties to tenants at or below 75 per cent of the market rate, aims to help those who are experiencing housing stress and are not eligible for public housing.

Those who access the service often work in lower to moderately paid occupations such as childcare, retail or community services.

“We find most of the people who come to Rentwell work full time but they’re just not on a high enough income to get into the ACT rental market,” Crimmins says.

Long-term rent rises

The Domain Rental Report for the June quarter reveals house rents jumped back up to a median of $690 a week – a record last seen in December 2022 – while unit rents dipped slightly to a median of $560 a week, the first quarterly decline in four years.

Over the past five years, some suburbs across the capital have experienced a rise of more than 30 per cent in the median rental asking price for both houses and units, the Domain data shows.

This includes houses in Cook (up 35.4 per cent), Calwell (31.6 per cent) and Wright (33.3 per cent), and units in Dickson (33.3 per cent) and Phillip (34 per cent).

Since Rentwell began in 2019, the program has had increasing numbers of everyday Canberrans seeking housing relief, Crimmins says.

The scheme is seeking to attract more altruistic property investors in order to expand.

“We do find our property owners tend to be locals who have [a couple of] investment properties and they’d like to put one in Rentwell to help out a fellow Canberran,” Crimmins says.

Incentives for investors

In a welcome move from the ACT government, individual home owners do not need to pay land tax if they lease their investment property to a community housing provider.

“The land tax exemption was one of the biggest tax levers the government could use to unlock private rental stock,” Crimmins says. “But it’s conditional: you must rent to a community housing provider that is registered with the government.

“A service such as Rentwell then must ensure it is renting the property to people in [specific income bands].”

From July 1, land tax is fixed at $1612 with an additional variable charge calculated off the average of the property’s unimproved value over up to five years.

This can equate to thousands of dollars each year, depending on the value of a property.

Crimmins says investors are also eligible to offset the difference between market-value rent and what they charge through a program such as Rentwell because the ATO considers it a charitable donation.

“We understand that investors need to derive an income from their investment,” she says. “However, when we look at the land tax exemption plus the deductible gift receipt, we often find owners aren’t any worse off than if they were charging full market rent.”

Tenants to home owners

Rentwell has supported hundreds of Canberrans with affordable rents, helping to alleviate rental stress and possible homelessness.

In the past two years, more than one former tenant has moved on to home ownership.

“That’s exactly the pipeline on the housing continuum that we would love Rentwell to be able to facilitate more,” Crimmins says.

While a variety of housing stock is useful to match the needs of tenants from different life stages, the program would welcome more apartments into the mix.

Currently, Rentwell manages 120 privately owned investment properties but Crimmins says it hopes to double this in the future.

“The original target was 150 properties under management but this is now being revised,” she says.

“We think 250 is a manageable and self-sustaining property portfolio for us so we can continue focusing on all areas of the organisation’s [support services] for vulnerable Canberrans.”

All in this together

As Canberra’s leading property website, Allhomes has been an early supporter of Rentwell since it began in 2019, providing free rental listings and advertising to spread awareness of the initiative in the Canberra community.

Allhomes general manager Kaaren Lewis says she is delighted to be renewing the partnership with YWCA Canberra for another year.

“We are absolutely honoured to be continuing our support of Rentwell,” she says. “This is a really valuable service for vulnerable Canberrans, especially in this current cost-of-living crisis.”

YWCA Canberra chief executive Frances Crimmins says the partnership ensures Rentwell listings can be promoted in the marketplace.

“Placing ads with Allhomes for Rentwell properties has been a wonderful donation from Allhomes,” she says. “We really do need key partnerships with philanthropic businesses like Allhomes to help us deliver this program.

“We also need philanthropic Canberrans who are happy to take a 25 per cent rental cut for their investment property to assist someone else.”