Despite results from the ABC fact checker, rent is expensive……

Reprinted from ABC new online 5-9-13.  Read directly from here.

Greens Senator Scott Ludlam exaggerates rent increases

 
Photo: Greens Senator Scott Ludlam exaggerates rental prices. (AAP: Lukas Coch)

“Rents across the country have doubled since the year 2000, but in the ACT, Queensland and WA they’ve actually tripled,” Senator Ludlam told the ABC’s The World Today program on August 28.

“It’s actually been a disaster for the third of Australian households that rent.”

Senator Ludlam made the statement after The Greens launched a policy document aimed at easing rental circumstances for Australia’s low income earners.

Real estate figures

ABC Fact Check asked Senator Ludlam for the basis of his claim.

His office said he used rental rates based on figures from The Real Estate Institute of Australia.

ABC Fact Check obtained weekly rental figures on two-bedroom units and three-bedroom houses from The Real Estate Institute.

For a second opinion, ABC Fact Check approached RP Data, a national property data agency, which performed an analysis on the weekly rental rates of all dwellings in capital cities across Australia from August 2000 to August 2013.

The figures were as follows:

Rental increases since 2000

The RP Data figures show that since 2000, rental prices for all dwellings have increased by well over half. In Perth they almost doubled.

The Real Estate Institute figures show the weekly rental costs of units have more than doubled across Australia and the figure for houses was just short of doubling.

In no case did all dwellings triple in rental costs in the ACT, Queensland and Western Australia. Unit rentals only tripled in Perth throughout this period.

Real cost vs dollar cost

Professor Michael Darcy from The University of Western Sydney told ABC Fact Check that comparative statements about rental increases should be adjusted for inflation.

Professor Darcy, who specialises in urban studies and housing policy, calls this a “real value” comparison.

“If you want to compare the price of something across a period of time you have to take into account inflation,” he said.

“If rents have tripled while the broader cost of living has also tripled then effectively the real cost of rent hasn’t changed.”

In the following table, ABC Fact Check calculates how inflation would have changed the results reported by RP Data.

As shown in the above table, rents have still increased using figures that take inflation into account.

However they have not doubled or tripled across Australia or in any capital city.

Across Australia, rents increased 15 per cent above the rate of inflation. In Perth they increased over 30 per cent and in Brisbane and Canberra around 20 per cent.

ABC Fact Check asked Senator Ludlam why he didn’t take inflation into account.

His office said he “simply looked at and reported increases to rent”.

A spokeswoman said the consumer price index, a common measure of inflation used by ABC Fact Check in its calculations above, doesn’t adequately measure or reflect house price inflation.

If the CPI did reflect house price inflation, then it would be much higher than 2 to 3 per cent a year, she said.

The verdict

Senator Ludlam exaggerated by saying rents have doubled across the country and tripled in ACT, Queensland and Western Australia without taking inflation into account.

Sources

• Scott Ludlam, The World Today, August 28, 2013
• The Greens’ plan to increase the supply of affordable and sustainable rentals
• The Real Estate Institute of Australia
• RP Data, Capital City Rental Rates August 2000 to August 2013
• Reserve Bank of Australia, Inflation Calculator
• Australian Property Monitors, Rental report, June 2013