Australian Property Rents Sky High as Prices continue to Increase

Give renters a break, landlords warned

By Chelsea Mes February 22, 2008 12:12pm

Australian Property Prices Landlords warned not to take advantage of struggling tenants!

Cost of replacing decent tenants may outweigh rental gains!

The latest personal finance news in our Money section

LANDLORDS keen to make the most of the tight rental market are being warned against raising rents, as they risk losing quality long-term tenants.Property insurance brokers Terri Scheer said landlords should not take tenants for granted in the midst of the rental squeeze. Marketing and Operations Manager Carolyn Majda said unreasonably high rent increases could cause angry departures of reliable, long-term tenants. Ms Majda said it took an average of four to six weeks to relet a rental property, during which time the landlord is unlikely to be receiving a rental income. She said the lure of higher rental returns needed to be balanced against the "importance of keeping good tenants". Although landlords would want to take advantage of low vacancy rates, Ms Majda said there had to be a point when struggling tenants reached breaking point. “It’s a fine line,” she said. “Sure cover your costs, but don’t take advantage of things like rate rises to raise the rents higher than really is needed,” she told NEWS.com.au. The reminder comes after rents hit record highs around the country, and startling figures showing renting battlers are doing it tougher than ever. Housing assistance not helping A report from the Australian Institute of Health and Welfare released today found federal and state governments spent more than $4 billion on housing assistance a year. "The stresses are showing up even after assistance has been provided," institute spokesman David Wilson said. More than a quarter of low-income renters sometimes go without food and 42 per cent of low-income renters cannot afford school excursions, a report released yesterday by the Australian Property Market and Urban Research Unit found. The Housing Industry Association’s national housing outlook yesterday said more than half a million rental households paid more than 30 per cent of their income on rent. Help on the way HIA said low and lower middle income rental households were under increasing financial strain and stress, fuelled by a shortage of investment in rental properties. “High government costs on new home building, the high cost of land, and the excessive regulatory burden … make investing in new residential property an unappealing option,” the report said. The HIA said the Federal Government’s proposed National Affordability Rental Scheme, which aims to build 50,000 new rental properties across the country, would ease the strain facing renters. Rents at record highs Australian Property Monitors data for the September quarter painted a bleak picture for renters across the country. In Sydney, where the housing affordability crisis is at its worst, rents for three-bedroom houses hit $400 a week, up 14 per cent over the year. Rents for units were up 12 per cent to $380 a week. Elsewhere, conditions for renters have deteriorated. Median rents for houses jumped 23 per cent in Perth over the year to September, 18 per cent in Canberra, 16 per cent in Melbourne, 10 per cent in Brisbane and 8 per cent in Darwin, Adelaide and Hobart.