Chief Minister Andrew Barr read the Real Estate Institute (REIA) the riot act after accusing its principal association of not understanding the gravity of the pandemic and not wanting to come to the table to talk about rent reductions for those who have had their incomes affected.
When asked about real estate agents pushing for rent deferrals in lieu of rent reductions with affected tenants, Mr Barr emptied the bucket on the industry.
“I don’t think the real estate institute gets it at the moment,” Mr Barr said.
“I do need to repeat this: the pain is going to be shared by everyone. There is no world that landlords skate through this without experiencing some pain, and it is more than just deferrals, it has to be about rent reductions.
“Landlords need to be part of the solution, so those comments from the real estate industry were particularly unhelpful and particularly out of touch.”
The ACT Board Director of the Real Estate Institute of Australia, Craig Bright, said he referred the ACT Government to Tasmania’s rental relief bill that sees rents deferred as opposed to reduced.
“If you look at other relief packages, they are all deferrals. If you look at banks, they are deferring interest and principal reductions,” he told ABC Radio on Thursday morning (3 April).
“There are issues with landlord insurance if it is deemed as a rental reduction because it is by mutual agreement, it really should be a deferral because this could be highly problematic in six months’ time.
“People have to remember there are a lot of property owners who are unemployed as well.”
But the Chief Minister said that the ACT Government is already waiving tens of millions of dollars of property tax and landlords would have to pass these reductions on to their tenants.
“Think about the implications for the broader community. It is not just about how much money you can make or you can salvage out of this situation,” Mr Barr said, addressing the REIA.
“They represent a small sectoral interest and, frankly, the broader community is starting to get a little sick of people trying to protect their patch so much and refusing to even budge an inch on this question.
“We will be dragging landlords to the table if we have to.”
The REIA has previously sent out media releases welcoming comments from Housing Minister Michael Sukkar saying renters who cannot pay rent would have to catch up again in six months and told tenant lobby groups that calling for free rent “does not cut it”.
“You need to be more socially and financially responsible than that and perhaps once and for all finally understand that money doesn’t grow on trees,” the REIA said in a statement on 31 March.
“For those tenants who have lost employment or have had their hours reduced, let our industry work through those issues. You need to understand that our industry wants the same outcome as you; to keep everybody housed and feeling secure at this time, but we all need to play our part.
“You simply calling for everyone else to ‘suck it up’ is utter nonsense given the mess that we are all in. You need to show some true leadership for all Australians because that is the only way that we will all get through this.”
Managing director of property management at Independent Hannah Gill, who also sits on the Real Estate Institute of ACT board, said every circumstance is different and it is up to landlords whether they want to defer rent or waive it.
Some landlords have already approached her asking to waive rent because they are in the financial position to do so, she said.
“The way it has been represented in the conversation about tenants and landlords sitting together to find good outcomes, I think the government needs to understand it is just not that simple,” she said.
“We are talking about the six months no eviction, what does that mean in real terms? What if we have a repeat offender for arrears prior to COVID-19? Do they get a get out of jail free card?”
The other problem with rental reduction is the knock-on effect that could see real estate agents out of a job, Ms Gill said.
“The risk we face in the industry is that if we stop collecting significant rental amounts, that highly impacts management fees which means the industry comes under threat and that is another whole series of potential job losses we are facing.”
Mr Bright’s comments came on the same day that the Australian Securities and Investments Commission (ASIC) chastised real estate agents who were calling on tenants to dip into the superannuation to pay rent.
“Financial advice must only be provided by qualified and licensed financial advisers, or financial counsellors, not by real estate agents,” ASIC said in a statement.