The Coronavirus/COVID-19 moratorium ending on the 31st of January 2021 has bought about a number of challenges for property managers, property owners and tenants.
Property owners who, through no fault of their own, were legislated against by government and nearly had all control of their investment property taken away from them are feeling concerned and nervous this may happen again. For some, that risk and financial loss has been too great and they have elected to sell their investment property and invest their money elsewhere.
Some may see this as a good thing as it has provided an opportunity for those who are able to purchase their first home to do exactly that. Real Estate Institute of Tasmania data shows there has been a 28% increase in first home buyer activity.
Unfortunately for tenants, the outcome of this has seen an even shorter supply of private rental properties available, which creates long lines at open for inspections, increasing rents across the state and places significant pressure on applicants seeking a residential tenancy.
The amount of work that has been undertaken by Property Managers and Property Portfolio Managers should not go unrecognised. At the beginning of the moratorium the workload for property management staff at least doubled. Working with tenants and property owners to reach compromises for both parties was extensive. Ensuring all parties were well informed of the requirements of the moratorium and providing advice so that these requirements were complied with was ongoing.
Now as we proceed back to the new normal post moratorium and property management staff back conducting inspections, ensuring all maintenance that could not be conducted is now planned and completed and complying with owners’ instructions to increase rents where appropriate. It should be noted that not all property owners increased rent even though they possibly were legally entitled to
The REIT acknowledge that Land Tax per se has not increased but in reality, that is not exactly true. Due to the asset increasing in value over the past decade, Land Tax for those properties has increased significantly and it is still real cash that needs to be paid by the property owner. Not to mention council rates, insurance and water fees.
Due to that increase property owners have no other option but to increase rent and to continue to do so as the Land Tax and other costs increase.
The only solution to the current residential tenancy crisis is housing supply. Providing incentives and opportunities to those that can invest in housing to do so and increasing stock will relieve the continued upward pressure on rent.
The government must consider abolishing Land Tax on the first investment property, in doing so providing an incentive and encouragement to increase supply.
We are now seeing constant statements in relation to the private rental market in Tasmania, such as, “Residential Tenancy Crisis”, “Owners Hike Up Rental Prices” and so on. It should be pointed out and very clear, the private rental market is not “Social Housing”. Any further regulation that Government, the Opposition, the Greens and the Tenants’ Union consider placing on the private market will only cause a further sell off of private rental properties by the investors. Things such as rent capping, removing the owner’s discretion for pets and allowing minor modification by tenants only act as disincentives for property investors.
We all know the only solution to the current situation is supply of properties and this can only occur by providing security, consistency and incentives by all levels of government and key stakeholders.
Mark Berry – Chief Executive Officer
Real Estate Institute of Tasmania