Landlords have welcomed “exciting” rent increases caused by record low vacancies and the housing supply crunch, while slamming proposals to cap rents to ease pressure on renters as “ridiculous”.
The Australian Landlord Association held a webinar on Tuesday titled “Is it still worth being a landlord?” amid rising interest rates and regulations they say are forcing them out of the market.
Sydney’s median unit rent rose to $575 a week in the December quarter, and Melbourne’s to $450.Credit:Peter Rae
Skyrocketing rents have contributed to a cost-of-living crisis for tenants, with helplines inundated and families skipping meals. It has led state governments to contemplate rent caps, and this week Queensland announced it would join NSW and Victoria in limiting rent increases to once a year.
Association committee member Roy Sanderson slammed proposals to cap rents as ridiculous. “I cannot believe it’s even being talked about by someone who is running our government or is a politician,” he said during the webinar.
“We can’t cap the cost of gas conversion, smoke detectors. We can’t cap the cost of our interest rate increasing. To suggest that we could cap rental increases to me is a ridiculous conception.”
Association president Andrew Kent agreed but said that had not stopped other states from adopting the policy.
Leah Calnan, former president of the Real Estate Institute of Victoria.Credit:Wayne Taylor
Committee member Leah Calnan told the webinar it was “really exciting” to see rents growing in metropolitan Melbourne and regional Victoria. “It’s great to see that there is a pattern with the trending of both units and houses … we haven’t seen those figures for some time,” she said.
Calnan said landlords should not be worried about upping their rent by $50 or $100 a week to offset costs. “You might lose the tenant, but in this market you will be able to replace the tenant relatively quickly,” she said.
“While they may not be excited about the rent increase they’ve received … we’re not seeing a large amount of tenants vacate as a result of the increased rent.”
Sydney’s median unit rent rose to $575 a week in the December quarter, and Melbourne’s to $450. Apartment rentals in both cities were up about 20 per cent year-on-year.
That was partly a rebound from when rents fell during COVID-19, as vacancies surged. Vacancies in all the major capitals have now fallen to 1 per cent or less, Domain data shows. Calnan noted anything under 3 per cent was deemed critical.
Contacted after the event, Kent said landlords were not celebrating the current rental spike. “If they were, people would be rushing into the market, not out of the market,” he told the Herald and The Age. “I don’t think that anyone is happy with the current state of play.”
Kent said landlords were not setting market conditions. “What you’re getting is tenants outbidding each other to try to get the property.”
He said landlords wanted stable policy settings, not constantly changing rules or rent caps that did not consider the actual cost of providing a property. He said compliance requirements and laws that made it harder to deal with problem tenants were also too onerous.
“All of those things are adding up and causing quite a few of our colleagues to depart,” he told the webinar. Despite this, all speakers agreed it was “still worth being a landlord”.
Speakers also lamented that the challenges faced by landlords did not receive much media attention compared to views of renters and the Tenants’ Union. “It’s just not a story that anyone wants to take up because it’s not a sad story, as such,” Calnan said.
Kent said: “We can knock on those doors and push for change and try and get our voice heard, but sometimes there’s nobody listening.”
The comments come as federal MPs try to resolve an impasse over a $10 billion housing plan that was one of Labor’s core election promises. The Greens want a national freeze on rent increases for two years, a doubling of Commonwealth rent assistance and an additional $5 billion for social and affordable housing.
After declaring last week that all options were on the table to combat skyrocketing rents, including caps on rent rises, Queensland’s Labor Premier Annastacia Palaszczuk this week opted to bring her state into line with NSW and Victoria by limiting rent increases to once a year.
Queensland Tenants said this did not go far enough, and rent increases should be capped at 110 per cent of the consumer price index (as in the ACT).
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