Mega Thread Rental market where you are? (Plus housing and the homeless)

[Number37]

There was a potato farmer on the radio the other day saying they were putting their price up 30c from a base of 20c a kilo - these were commercial potatoes but whatever.

My issue is if the farmer is selling them for 20c a kilo why am I paying $7.50 a kilo at Woolies?

Woolies and Coles and Aldi and all the other large supermarkets are a con.
They price gouge farmers AND consumers by cornering the market.
If that isn't bad enough, you are most likely paying $7.50 a kilo for last seasons potatoes they've had in cold storage for more than 12 months.

Just another con brought to you by capitalism and the neocons.
Exhibit 999,999: petrol prices.
Average margin for petrol companies for the last 10 years was about 2c/litre.
Been almost 10 times that in the last year....can't remember if it was 14c or 18c/litre.
If you say "war in Ukraine" enough times you are allowed to increase your profits 10 fold, no questions asked...apparently.

 

[Madas]

So what’s to be done ?
Do we keep just bending over ?

When does the revolution start ?

 

[Nuggs Bunny]

So what’s to be done ?
Do we keep just bending over ?

When does the revolution start ?

Welcome comrade

 

[HairyO]

For property investors, interest rate rises need to be offset by rent increases. Surely you don't expect investors to take the full hit?

Were they lowering rents when interest rates fell to the lowest level ever ?

 

[GPW1]

My issue is if the farmer is selling them for 20c a kilo why am I paying $7.50 a kilo at Woolies?

**** you is why!

 

[demondavey]

For property investors, interest rate rises need to be offset by rent increases. Surely you don't expect investors to take the full hit?

And herein lies the major issue, it’s a dog chasing it’s tail and not stopping. We’ve created this terrible situation where people are dependant on rental properties because they’re priced out of the market, interest rates are now up and because we have turned property into taxation tools and income generating assets we have to continue to pass down costs.

Scrapping negative gearing wouldn’t stop this happening per say, but it would certainly stop incentivising people who are wealthy to buy property for tax benefits, increase the stock on the market, and allow prices to cool naturally.

 

[demondavey]

Were they lowering rents when interest rates fell to the lowest level ever ?

Exactly. They weren’t. They basically look at it this way;
1. Mortgage payments are X
2. Rent needs to cover X
3. Rent needs to be higher where possible to cover costs of property
4. Creative accounting where possible to still gain a tax advantage

The whole problem is that housing has been used as a tax minimisation tool.

 

[demondavey]

Doubtful.

Tenants were given extreme leniency in rent payments over the past couple years. Does that count?

Because of job losses, because of COVID. It doesn’t count, no.

 

[demondavey]

Reading today that the Sydney rental market is a horror show right now.

Why hasn't negative gearing fixed this? It is supposed to encourage supply of rental housing, isn't it?

What is the rental market like where you are?

Negative gearing was never designed to fix this. Ever.

It’s not just rent. It’s cost of living more so.

 

[demondavey]

You'll find the vast majority of mum and dad property investors aren't looking to extract the maximum amount of blood from their tenants. They're generally happy to take unders if the tenant looks after the property, isn't demanding, and pays on time.

Interest rate movements are a game changer, in that they increase costs for the landlord. Those costs need to be offset by increased income which typically comes from rent.

That's where you'll find landlords looking to take that extra $20 per week, and where 'market forces' shift rental prices up.

You raise a good point that it may take years to bring rent increases in step with interest rate rises. I'm just glad to be out of that game for now.

But it certainly doesn’t discount the landlords that benefit from desperate people trying to rent and wanting to extract maximum blood. They all play the same game which is the issue.

 

[nut]

So what’s to be done ?
Do we keep just bending over ?

When does the revolution start ?

We are screwed … they’ve got drones

 

[Herne Hill Hammer]

Perth is dreadful right now. Quite a few horror stories around.

Increased cases of adults moving back with parents including those with spouse and kids.

The whole country is terrible at the moment as far as rentals go. Airbnb and other short term rental apps have sucked a mountain of properties out the long term market and greedy property managers are putting rents through the roof, well above any interest rate changes, the system is ****ed.

As a starting point, every single incentive or tax discount for owner occupiers and investors alike should be scrapped.

People / families should never be living in their cars or tents in a local park because they can't get a rental.

Rents going up $100 or $200 a week after a lease hasn't been renewed is a ****ing disgrace. They know someone desperate to keep a roof over their head will pay it and just go without food or electricity.

Investors not happy the price of their properties have increased 50%+ over the past 2 or 3 years

 

[Rob R]

And it is just going to get worse with the ALP pushing to reintroduce the LNPs disastrous high levels of immigration. It is only one factor but cutting immigration and , banning non citizens having a share in more than the property they live in would help to cut the demand side of the problem.

On SM-A125F using BigFooty.com mobile app

 

[spinynorman]

Thankfully the intellectual clout of the Australian media is calmly and reasonably analysing potential solutions to this problem:

The Greens this week urged the government to impose a nationwide rent freeze for two years, citing the sharp increases in rent that have outstripped wage rises in recent months.

The minor party has also called for future rent increases, beyond the proposed freeze period, to be capped at 2 per cent every two years.

“Max, this does sound vaguely like socialism, possibly even communism. How would it work in practice?” host Hamish Macdonald asked.

 

[Scotland]

Exactly. They weren’t. They basically look at it this way;
1. Mortgage payments are X
2. Rent needs to cover X
3. Rent needs to be higher where possible to cover costs of property
4. Creative accounting where possible to still gain a tax advantage

The whole problem is that housing has been used as a tax minimisation tool.

I rented out a house before then during COVID. Not a glamorous property or anything but at the time renting made sense over selling as the market was soft.

Anyway, when I leased it out the loan was on a fixed term at 3.8%. What I thought was fair rent made it basically cashflow neutral in terms of interest and council/water rates. Along came COVID and I thought the tenants might miss payments or ask for a reduction or who knows what. Nothing happened. Tenants were fine and the rental market exploded. Fast forward to the lease expiring and the tenants wanted to extend. Property manager suggested a rent increase of 5%-10%. Meanwhile the interest rate on the loan dropped to 2.5%. Zero correlation between ownership costs and rental value, zero.

I've since sold but now rates are going back up towards normal (still low) levels people will be justifying rent increases on that basis.

 

[spinynorman]

Worked from home on Wednesday so was able to do my first rental inspection for a studio around the corner, figured 10am on a Wednesday it wouldn't be too bad.

I was one of 48 people there.

Really looking forward to the rest of my viewings coming up.

 

[Proper Gander]

Rental market looks concerning where I am. I moved to this rental in South Yarra 6 months before Covid which was nice because it has outdoor space which was a lifesaver mood-wise in lockdowns. But it’s year-to-year and every year I get nervous that the owner might not renew, or will sell or whatever, because my online exploration indicates that there is now WAY less available, and at a substantially increased cost where it exists. And with more people searching.

Which reminds me, I have a house inspection next week so ****

 

[Upgrayedd]

Was renting a place and was told the owners were not interested in renewing the lease, offered to stump up more then the legally allowed 10% rise which was from 300 a week to 330

Month later back on the market for 430 a week, Wish I just poured excess cooking oil down the sink now

 

[The Dice Man]

Was renting a place and was told the owners were not interested in renewing the lease, offered to stump up more then the legally allowed 10% rise which was from 300 a week to 330

Month later back on the market for 430 a week, Wish I just poured excess cooking oil down the sink now

What kind of area are you living in? Inflation is going to wreck so many.

 

[SBD Gonzalez]

Some pretty commonsense suggestions here.

Australia’s housing crisis is self-inflicted. We need four reforms to reverse it | Matt Grudnoff

Public housing underinvestment and huge tax concessions to landlords have wreaked havoc on our rental market

www.theguardian.com

 

[Big Papa Ted]

Just ban the ownership of domestic dwellings that aren't your primary place of residence. That'd solve a huge swathe of the problem

 

[Rob R]

Adjust negative gearing (Max number of properties, kill depreciation expense given you can claim repairs and properties aren't depreciating)

Ban non permanent residents from having a share in residential property

Ban non citizens from having a share in other than the house they live in.

If a non citizen does not live in a house for more than 250 days a year, they pay 10% land tax on the current value of the property. If they fail this test two years in a row, they must sell the property within six months.

Ban property ownership as a consideration in accessing residency.

Limit the number of airbnbs in each area.

If a property is left vacant for a year then land tax etc doubles (including land being banked unless construction is underway)

Cut immigration to sensible levels (less than 100k) reviewed each year based on what we (Australia not the property industry) need and can support.







On SM-A125F using BigFooty.com mobile app

 

[Rob R]

Was renting a place and was told the owners were not interested in renewing the lease, offered to stump up more then the legally allowed 10% rise which was from 300 a week to 330

Month later back on the market for 430 a week, Wish I just poured excess cooking oil down the sink now

We own a house in coastal Vic and rent it out (because work forced us to move away but we will back in a few years). Lease was up for renewal recently and our agent told us not to renew and readvertise a few weeks later for over $200 a wk more. We said no - being honest it wasn't because we were being nice, we just didn't want to take the risk of losing really good tenants and we had taken a 5 yr fixed interest rate loan so the increases weren't impacting us.

On SM-A125F using BigFooty.com mobile app

 

[burge13]

Adjust negative gearing (Max number of properties, kill depreciation expense given you can claim repairs and properties aren't depreciating)

In favour of this even as someone who benefits from the rules but if we're capping the max number of benefits id like to see the same thing applied to having kids. Shouldn't get benefits for perpetually being on maternity leave and not contributing

Any decision on negative gearing (and policy in general) needs to take into account we need policy to get people off public purse reliance. Investing in a rental does that. Reward hard work and sacrifice, not those who just expect the government to bail them out when they havent saved a cent in a lifetime of work.

 

[Howard Littlejohn]

Unit average (all units)
Sydney $571
Canberra $557
Melbourne $453

All capitals $510
National $510


House average (all houses)
Sydney $748
Canberra $865
Melbourne $582

All capitals $686
National $582


Canberra's housing stock is newer on average though, which may account for some of it.
Even when I moved up here a scummy unit in one of the lower priced suburbs was higher than what I paid for a (still scummy, but) better place in South Yarra. That was not newer stock in either city, uninsulated top floor in Canberra.
At that time buying was cheap by Australian standards, but renting was a nightmare - partly because there was higher turnover every Christmas. People doing their 12 or 24 month stint in the capital before returning to the state and regional offices weren't buying in Canberra.