28 July 2022

Landlords need to move with the times - their tenants have had to

| Ian Bushnell
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For Lease sign

The changing rental market means tenants are calling for greater rights. Photo: Michelle Kroll.

It’s time for the property industry to accept that the rental landscape has irrevocably changed, partly due to the policies it has championed and benefited from for the past 25 years.

It is no coincidence that the rate of home ownership has fallen and continues to slide in this country at the same time tax settings favouring property investors and the sourcing of income from rents have become set in stone.

The industry argues that negative gearing and capital gains tax discounts are vital to the provision of rental properties, but this has led to a whole new class of investors who had the capacity to bid up prices which, together with government first-home buyer grants, have led to Australia having one of the most expensive housing markets on the planet.

Throw in government migration policy, the running down of social housing stock and the neglect of measures to actually boost housing supply, and you have a situation where more and more people are locked out of the housing market and are now resigned to renting.

The irony is that all the government effort to support home ownership has had the opposite effect.

READ ALSO ACT to ban no-cause evictions in tenancy laws overhaul

Renting is no longer just a rite of passage where you would temporarily tolerate dodgy properties, dodgy landlords or their agents and leases that confer few rights before walking through the door of your own ‘castle’.

It is now a way of life fraught with shock rent rises, unmaintained properties and sudden lease terminations.

It’s a casino where the odds are stacked against you, and with every spin of the roulette wheel, you hope the next move will not be for a while.

Of course, landlords will say it is also an insecure business for them, but in an era of minuscule vacancy rates and more renters than ever to choose from, they are well and truly in the driver’s seat.

So it is no surprise that governments are now redressing the imbalance by giving renters more rights, particularly around security of tenure and minimum property standards.

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This week’s draft Residential Tenancies Amendment Bill from the ACT Government has been well flagged and is the product of already extensive consultation.

The position of the real estate industry has not changed since the changes were first proposed. It says they will simply lead to landlords’ greater costs being passed on in higher rents or an exodus from the market.

First, rents are already among the steepest in the country so further increases will be hard to justify or sustain. Secondly, with returns and capital gains being so consistently high and reliable, a stampede is unlikely.

Those who may decide to leave probably are operating an unsustainable business model despite all the tax advantages they enjoy.

Tenants deserve a level of security and homes that are maintained and do not cost a fortune to heat or cool.

There are sound economic and health reasons for this and the demands of the property industry should not override them.

The government says it has taken a balanced approach so that landlords can still manage their properties effectively, and so they will.

The industry should stop crying foul about changes that are not only just but overdue and learn to work within the new property environment that it has helped build.

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Incidental Tourist7:17 am 02 Aug 22

If you have views on this matter, you can upload your submission or short comment on Public Exposure Draft of the Residential Tenancies Legislation Amendment Bill 2022 portal by 26 August. https://yoursayconversations.act.gov.au/expanding-rights-renters

Many tenants (but not all – there are some great tenants out there) are upset and bitter with the banks because they cannot get a mortgage. Whether this is because they have not saved a deposit, do not have stable employment or have bad credit, they are angry at the banks and at society in general. They think they are victims. But instead of taking out their frustrations on the banking system (which makes a billion dollar profit every year and makes much more than any landlord ever would), it is easier for bitter and disillusioned tenants to target and continually attack landlords (who kindly provide them with a house to live in -which many tenants do not appreciate or take care of). If tenants think they are entitled to own their own house, and believe owning a house would solve all their problems, then the solution is easy – go get yourself a loan from the bank (like everyone else has to) and buy your own place.

Should I ever have wondered why people might have a low opinion of landlords?

Phydux, put yourself in others shoes every now and then and you’ll realise the world doesn’t revolve around you. Should I ever wonder why people consider millennials a spoilt and stuck up generation?

Welcome to Earth, Sam Oak. Of what is this you speak from afar?

Your complete lack of perception or insight is sometimes pretty funny.

Spot on!
I don’t own any rental property in the ACT, if I did, I would sell!

Why do tenants insist on referring to the dwelling that they rent as theirs, but when it comes to any maintenance they insist on the landlord to pay for it.? Just saying

Did I read right “your castle”? No it’s not your castle, you pay the landlord to live there. It’s there property.

We don’t own a rental property, but if we were to rent our house before we received $1 in rent, the ACT Government would puts
it’s hand out for $3,000 in Rates and $4,500 in Land Tax. That equated to approx. $145 per week. Then there is interest, agent’s costs, repairs, maintenance, maybe strata levies, etc before the landlord has seen a cent.
Forget the arguments about Negative Gearing, because for most people, other than the uber-high income earners, for every dollar they spend, their tax refund is 30 cents: a loss is still a loss. Maybe there will one day be some capital gain, maybe one day the property will become positively geared?
I’m not opposed to rental properties being of a reasonable standard or at least there being an energy rating scheme; for tenant information purposes, but when the Government forces landlords to invest more into their properties, they will want a commensurate return on that investment: aka a higher rental return.
Canberra alreadt has the highest rentals in the country. Part of that can be attributed to the ACT Government’s Rates and Land Tax even more expensive!
The other thing that gets me annoyed is that as a home owner of a bitterly cold house, the Government has programs to advise renters about making their place more energy efficient and now they look like forcing landlords to make their tenants properties more liveable. Where is the help for people who aren’t renters? Oh, I guess they’ll lend me $15,000 to put on solar panels etc. They’ll invite me to go into debt.

If I rented out the house today that I used to, I would be criticised for it being not energy efficient enough. Too cold in winter and too hot in summer, as if I am a cruel owner who wants their tenants to suffer. Well, at the time I lived in an even worse house. My tenants had the better house. So I agree with your comment. Lots of talk as though the owners are bad people for expecting their tenants to live this way, when the owners might be living in even worse conditions. Gees the rental property was plumbed for hot water, while mine wasn’t.
If houses are to have their energy rating improved, it should be at point of sale, and the buyer should be the one who needs to upgrade. It would be an expense they could factor in. In the seller had to do it, there will be those who are selling because of hardship and don’t have the money to upgrade the house for sale.
I will add that the rent I charged matched the condition of the property, being lower than most other properties. Possibly all other three bedroom houses.

Leigh Devlin7:07 am 31 Jul 22

You seem to forget that rental investors don’t generally own the property they are renting, and most likely could not afford to pay off a second house without a renter. Your capital gain in owning an asset after the mortgage is paid.

Most landlords have a mortgage on their investment property and are reliant on the rental income. Costs like Land Tax etc, artificially push up gross rental income, but that increase goes to the ACT Government. Unless a property investor bought just before a boom and cashed out, it’s a very long term investment and no guarantees.

‘Then there’s interest…’ So, you’re an investor blinded by the belief that the creation of modern serfdom is in some manner productive. Wake up! Australian investment in housing is at best a Ponzi scheme stealing wealth from future generations. We’re the country with the greatest personal debt and also with the highest housing cost. I don’t know how you can’t hear the alarms.

In this entire column the issue of wage parity is missing. How is it that those who have bought homes are villains causing societal harms. How come younger people can’t afford homes either rented or bought? It’s not because of the haves, a large part of the cause is affordability. Wages are deplorably out of step with costs ATM. Fix this and both rents and homes become more affordable. Just don’t expect to read about it anywhere in the msm.

I believe there is a Local govt. initiative to manage Houses bought as an investment, rental to provide Low-cost housing to those, not in a position to buy or Rent in the open market. I have been a Landlord & a Tenant & thought that this was a good program. I believe one of the MLAs was surprised that not that many Canberrans were taking advantage of this idea.
Greedy landlords getting rich on OPM (other people’s money) is the problem. As a much younger person, I was fortunate to have several good landlords,

Amanda Kiley9:07 am 30 Jul 22

I have been reading articles on this subject for a while now and can only thank my amazing shares, whose dividends keep rolling in, twice a year at a minimum (yes, even during the GFC and other downturns – without going down on previous payments) and managed funds, whose income keeps coming. And, I don’t need to deal with agents, tenants, repairs or maintaining a property. I can sell all or part of my investment if needed and have the funds within days. I would never own a rental property.

The highest rates in the nation coupled with a land tax penalty just because your renting the property out makes the ACT a terrible place to be a landlord.
When we were posted away for 2 years our tax advice was to leave the house empty, so don’t tell me that being a landlord is a gold mine!

Zebra246907573:06 pm 29 Jul 22

Housing supply has been greatly restricted by town planning departments It is government that has caused the problem Yet it not only rarely mentioned but falsely claimed that government will solve the problem The free market will address the problem if allowed but power hungry government bureaucrats stop this from occurring

Wrong – a neoliberal approach to housing has been an abject failure. All the evidence shows that land markets are uncompetitive, the free market drip feeds supply in pursuit of profit while lobbying against planning & development restrictions, and that all levels of government need to step up and govern in the public interest.

The reverse midas touch, everything the government touches turns to …..

One only assumes that the government wants to ban home ownership and make it that everyone has the right to the same living conditions allocated to you based on your level.

If you ever move away for work temporarily may as well sell the house you worked so hard to build as if you rent it out, you’ll never be able to get it back.

Current government basically bastardised contract law, when you sign a contract for set terms and conditions, lets you and the government set whatever terms you want without the agreement of the owner. Yet at the same time pushing for new verbal consent laws.

How can they be pro abortion without being pro-eviction? They are basically the same, you are forced to support something that you don’t want, with financial and physical penalty for.

gooterz wrote: “if you rent it out, you’ll never be able to get it back ”
Obviously false. In your scenario, you give notice of return and move right back in.

The last paragraph is beyond …. well, I am practically lost for words. Equating abortion to eviction. And Heavs is worried about mere vampires, there is you about the place.

Ah, another Bushnell special.

The problems outlined in the article are not solved by the ridiculously one sided measures the ACT government are considering. In fact they might even make the situation worse.

There might be reasonable measures around rentals that the government could put in place but the current proposals are just really stupid.

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