Much has been said of late regarding residential tenancies. At the end of January, the government made the decision to cease its rental support scheme, with some considerations. Eligible tenants and landlords will still be able to access assistance until March 31 in an attempt to ease the transition back to a market-based situation.
The rent for residential property has been on the up. And the removal of restraints will likely lead to further rental price increases.
This market is fuelled by an increasing demand for rental housing and the re-emergence of a strong short stay market. The lack of suitable social housing is putting enormous pressure on tenants, many of whom will also be hit with the reduction and withdrawal of JobKeeper and JobSeeker payments.
Advocates for all sides of this debate have been making their voices heard.
Landlords have welcomed the move to end the limitations. They have argued that many of them are small and not wealthy operators; that they have been heavily constrained during the COVID restrictions; that it is them and not the government that has had to wear the cost of these restrictions; and it is not before time where they are able to reset to the market. The underlying opinion is that landlords should be free to do what they wish with their properties.
The head of Airbnb has echoed this theme, saying that very few Airbnb properties are suitable for long term rentals and that the problem of housing shortage is not a result of Airbnb. They posit that they are assisting the reinvigoration of the
On the other hand, the spokesperson for the Tenants Union has been seeking an extension of the period the restrictions are to remain in place. In a recent statement, they put forward that tenants, particularly those on JobSeeker, are gravely concerned that rent hikes may mean they will no longer be able to afford the accommodation they are in. As a result, they are living in fear of eviction.
All of which is awkward, to say the least.
We could take the simple approach, as real estate companies are wont to do, and say “let the market decide”. After all, that is what our businesses are about – prices go up when there is a shortage and come down when there is a glut.
However, as an operator within the community, we also see the broader situation. We are concerned about the level of social disruption and dislocation that changes to the government programs may bring about. We are not alone in expressing such concern.
In all of this debate, little has been said of the commercial market, and we believe some focus should be given to it as well.
Like the residential sector, government interventions have enabled businesses to survive, even when trade has been severely affected. Businesses have been able to keep staff employed, even when there has been little for them to do, and businesses have been able to retain their premises even though turnover is down.
The removal of these constraints and interventions will now bring about adjustments including paying back rent previously deferred, which may adversely affect those operating from rented premises.
Unlike the residential sector, demand for commercial space is not as high. Landlords are faced with a conundrum: to keep a tenant even though they may be unable to meet rental expectations, or have the tenant leave and be left with empty premises and re-enter the lease market.
Added to this mix is the directions taken by local councils and their planning officers to encourage – or otherwise – commercial activity in their precincts. At a time like this, with elements of the economy suffering, we believe it the responsibility of councils to do whatever they can to encourage people to enjoy the experience of being in their precincts.
Councils have to enable social housing developments to occur through various planning schemes. However, it remains a fact that getting approvals through councils can be a long and tortuous process.
The COVID experience has shown us that there is more than one way to do business, with home offices and online shopping playing a greater role in the way people do things. We believe these changes are here to stay, and as such many of us will need to be adjusting to the new paradigm.