We pay $450 a week, just got a notice saying the landlord is increasing it by $15 a week. Does that need to be justified or can they just do that?
I'm in the ACT. I know they have to give 8 weeks notice and can't do more than one rise in 12 months.
$15/week rent increase: justified?
[Deactivated] on 29/08/2019 - 09:35
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Rented in ACT, had a rent hike from $350 to $360. Not justified but not unreasonable. Was upset and rant to my friend. Then I bought a place and moved out, so no more rent hike.
This is the OP's third option - that's what we did when we got tired of being treated like second class citizens.
I also know the Canberra market and as others have said, the Barr government has been hiking rates and land tax massively over the past few years - your landlords are doing what you'd expect, namely making the rent reflect their increased costs.
Unit taxes have also increased dramatically because the govt also changed the calculation method, which means unit owners now pay the top rate of tax which used to be reserved for high value houses.
Land tax notwithstanding, rates for our unit have risen by around 18% each year for the past three years (averaged out, was around 30% in the first year) . This is why landlords are passing on price hikes.
Only you really know what the rent conditions are in your area to know if it's worth copping it. I think $15 is a bit rich but no tenancy tribunal I am aware of in Australia would consider that outlandish enough to stop in the context of a $450 week rent. Realistically, you'll have to cop it or move (and yes, I'm a long term renter so I know that's disruptive and costly).
Asking real estate questions on ozbargain is asking for a hiding as it seems many here are either "property investors" themselves or tenuous home owners who cling to that "status" they believe it gives them over non-home owners. The fact it seems many of them are threatened by tenants questioning rent rises might be an insight into just how tough they are finding it to lord it over us lesser types (who may in fact have more than enough in liquid assets to buy a house but choose not to).
Apparently it's wrong to question them raising rents when interest rates are plunging but then apparently it's natural to increase them when interest rates go up. The contradiction is lost on them because they have no interest in helping you out or seeing your situation. Of course it's a market but the people on here throwing aroudn the terms "supply and demand" seem oblivious to how fake that market is. Try starting with a central bank that simply sets interest rates - a blatant bit of "socialism" they conveniently have no problem with as it benefits them.
Canberra is doing well thanks to all the government jobs (and they are well paid) - more "socialism" - and unfortunately the people who already own assets there are making out like bandits thanks to the "free market" (lol).
us lesser types (who may in fact have more than enough in liquid assets to buy a house but choose not to).
Why not? Because there are better investment opportunities out there? I agree, which is why I'm selling my investment property when my long-term tenants move overseas in a couple of weeks. The soon-to-be new owner, a neighbour, is planning to air bnb the place. So, that's one less long-term rental accommodation in the market…
Wow, that’s well mean imo. I know of friends who have been renting for years and the rent was never raised. I would start thinking about moving even if it’s a pain the arse. Or just get used to getting a rent rise every year.
A few percent increase is 'mean'? And also you are advocating moving, the costs of which are likely to greatly exceed one year's worth of the rent increase?
Not a lot of common sense or rationality being demonstrated in this and other similar comments.
I said “or just get used to getting a rise”. Up to op really. I only rented for 18 months and hated it. It’s costing me more than renting but I have more freedom and more control.
Is there something you'd like changed or fixed at the property? Now might be a good time to negotiate that
From somebody who's been on both sides at the same time (rentvesting):
From a pure percentage standpoint, it's not a significant increase, considering the CPI, in ACT it's land tax increase and rates increase - the latter two tend to grow faster than the CPI, plus and as everything, it's negotiable. Look around and see if the new rent actually is new normal for the area.
If the suburb you live in is popular, the landlord might be offering you a good deal. A case in point would be one of my properties where the average price for the area is $450-460 and my tenants currently paying $410. I am planning to bump it to $425, at face value $15 increase may sound a lot, but it's way less the average anyway and it won't cost me more than a week (likely just a couple of days) to get new tenants in.
Consider moving costs (a pain in the neck).
Bargain
Ask to fix something that annoys you, if any. Also if you've seen significant investments from landlord during this year - you might be just getting a bill for that
One thing I want to mention specifically to call out ACT and Canberra - the rising tide of the land tax will significantly affect the scene there and you might just starting to observe it's green shoots. The reality is, the land tax is quite blunt method to replace the stamp duty, which supposed to be gone when GST was introduced but it has not, and it's increase will eat into landlord's profit margin and will be passed in to the tenants. Because all landlords are affected, the raise will likely to be uniform across the territory. Combined with subdied development activity in the area - there was an oversupply a few years ago - it will be a problem with not enough stock - so if you are planning to stay on that market, it's better you hedge your finances by either buying your own place or a rental, however for the latter you might need to go interstate as ACT yields are pretty bad when the land tax is factored in.
wow only $450 a week?? I pay $900 for mine :(
Yeah because you probably rent the Sydney harbour bridge.
What sort of question is that from OP?
They are paying $450pwThey are whinging about a tiny $15pw increase?
Thats like 3%. Its nothing.Isnt the owner entitled to cover some of the cost increases they have incurred over the last 12 months…
land tax up
rates up
body corporate upIm sure the agent has done their research and worked out OP is paying way less than the market rate.
Last thing landlords want is a tenant complaining about insignificant things.
If you dont like the rent increase then just move out!
PS No point asking anyone here as its all about the local rental market.
So only you (OP) can decide on that. But to most here $15pw is rather insignificant. Even a 10% increase is not unreasonable depending on when the last rent increase occurred.I wouldn't go as far as saying $780 per year is insignificant. But I'd say it is possibly reasonable when considered against other increases the landlord may be faced with… Maybe.. I don't know Canberra well.
But when compared against the increases that I am faced with over the past year (in south East Queensland); my rates, home insurance and water hasn't increased by nearly $800. They have increased by roughly 3-5% but their starting value was much less. And 3-5% of a smaller number is still a smaller number (~$240 over the year for me) .
I'd be trying to negotiate with the landlord for something in between, like $5-10 increase pw.
You might want to check out land tax rates in ACT. They are removing stamp duty in favour of extra and much higher land tax which grows significantly above the CPI, affecting both investors and owner occupiers.
Im sure the agent has done their research and worked out OP is paying way less than the market rate
It's not less than the market rate, it's bang on for the market rate, actually. Don't you think I have had a look around, too?
a tiny $15pw increase
If it's so tiny, why is the landlord bothering? It's as large for me as it is for them, as significant, and as tiny.
If your happy renting the property and you know your situation won't change within a couple of years, agree to the increase but ask for a 2-3 year contract.
If you think $15 - 3.3% is bad try living in Tasmania.
Cousin had rent go up $80 - from $350 to $430 in one year. Completely legal and unfortunately they had to accept as the rental market is so tight. 15+ people looking for a very average and expensive bedroom unit.
Edit - the 20% increase was the average increase for Hobart rents in 2018
I had a similar situation a couple of months ago, also in Canberra. The real estate has given consistent positive feedback during the tenancy, the place was on the market for a number of weeks before we tenanted it and the rent is close to the maximum we are comfortable paying. I put that into an email, also putting forth the benefits of having consistent and considerate tenants and the landlord reconsidered the rental increase. Worst thing that can happen is they say no and then you consider your options.
Ah Canberra i see.
Was gunna say if this is in Sydney they're being very cheeky, rents are dropping (from highs).Am I missing something here?
Headline: Greedy Landlord jacks up price 3% ?????
What doesn't go up 2-3% per year?
Would there be a thread "milk prices up 3%"?
There would be if health insurance "only" went up 3%.
That is inflation, prices go up.
The Reserve Bank in Australia manages the economy to achieve price increases in the range of 2-3%.
https://www.rba.gov.au/education/resources/in-a-nutshell/pdf…
ie: prices going up 2-3% a year is a good thing for the ecomomy.What doesn't go up 2-3% per year?
Wages?
My rent was up by $5 pw (Adelaide) last year and I contested it.
- no house improvement
- no salaries increase
- rent always on time.And what happened?
My landlord kept the rent unchanged. would have costed him more to get new tenants so win-win and no brainer decision for him.
The law doesn't really work for this sort of matters…I went to SACAT twice without a satifactory success, still a couple of favourable decisions though. This sort of matters is all about streetwise…
You took your landlord to SACAT twice(!!!) for a $5 rent increase? Wow! What happens when you move out? Will the landlord give you a reference? Is the RE going to blacklist you?
I haven't read every single comment on this thread but to sum it up, this is what the law has to say:
Rent increase
As per the Residential Tenancies Act 1997 (RTA), rent increases can only occur once every 12 months. If a rent increase is scheduled, landlords are required to give tenants at least eight weeks notice in writing. <- You're already aware of this.If you believe its excessive
Apply to the ACT Civil and Administrative Tribunal (ACAT) for a rental review. Unless you apply for this formal review before the rent increase date, you will be responsible for paying the new rental rate when it is enacted.If you do decide to apply for a review, please let us know how it goes. Interested in seeing what the outcome will be.
How can I get negged for quoting the law?! Some people only want to hear what they want to hear.
Balanced those two for you.
Consider self a Thursday morning beneficiary of the law of the negation of the negation :)Some elsewhere lighter fare for you, Jar Jar Binks, from some foolish time spent on a Wednesday.
You're back and you're still in Brissy? :) Thought I read somewhere that you were moving to NZ .
Sounds justified .
My general understanding (not a lawyer) is that they can basically raise rent, as long as it is reasonable there would most likely be something about that is the laws and regulations. And I don't think you could strongly argue that a $15 on a $450 property is unreasonable. I would be grateful actually, because that is about 3% .
Inflation seems like more than that (not that I've checked current inflation).
As long as they are doing everything right with upkeep of the property etc, then I wouldn't say anything about a 3% increase in rent . They might dislike you challenging the small 3% rent increase, and then bump it up 10% next time, or just not renew your lease and rent to someone else.
The only ppl I know with rent that doesn't really ever up, are either close friends etc with owners of home, or;
They live in run down properties, and they put up with it because the landlord keeps rent lower than market value.
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Greedy landlords.. serves them right.