Landlord Increasing Rent over $85 a Week, Should We Move?

LCreamsoda on 28/04/2022 - 15:40
Last edited 28/04/2022 - 16:09 by 1 other user

hi guys just want some opinion on the issue. We are currently renting a 2bedroom 1 bathroom apartment in South Yarra VIC Our 12 months contact is coming up with our apartment in SouthYarra and the landlord has contacted us to increase rent from $500 to $585.

We rented the small place (small kitchen that wont even fit a large single door fridge only 1m kitchen bench space for food prep) paid above rental market price during the height of the pandemic with most of the newer apartments going between $350-$450 at the time thinking paying regular pre-pandemic rates will likely to get our lease renewed as moving is a major pain and are not keen on doing it every year. now the landlord has said the market is shifted and the agent has gave them a suggestion that a $85 increase a week is market price, which i think its insane most newer apartments has gone back to around $500. we like the area and prefer not to go through the trouble of moving.

Is our landlord ultra greedy? should we find a new place or even try to negotiate the rent?

Poll Options

  • 525
    Yes
  • 19
    No
  • 75
    Negotiate
Home & Garden

Comments

      • Clear on 28/04/2022 - 17:08
        +6

        I certainly think increasing rent by $100+ for existing tenants purely because of the current market is greed in my opinion. Having an unoccupied rental and increasing the rent beyond what the previous tenants paid for, e.g. $100+ more is fine in my opinion. Perhaps I'm a good landlord and don't want to burden my own tenants too much with massive increases?

        • metallum on 29/04/2022 - 21:30
          +1

          Some people invest in property as an investment, others for charity. Just cause you choose the later doesn’t mean others are greedy.

          • Clear on 29/04/2022 - 21:33

            @metallum: Obviously. You need to see the difference between someone expressing their opinion on how they see certain actions and when they're saying something is factual. Everyone's reasons for having a rental is different.

            For me my property is an investment to pay off the mortgage at the bare minimum and the rest is for tax until I decide to move in later. I plan on increasing the rent to be able to pay off more of the mortgage. The difference is I'm not doing a significant increase while tenants are there. When the tenants leave soon I'll put it back up to rent with a much higher price.

  • stirlo on 28/04/2022 - 18:21
    +2

    In South Yarra newer apartments aren’t necessarily better. Older ones often have larger rooms, easier access and are in quiet streets. New concrete dog boxes in the sky will obviously go for less.

    $85 is a 17% increase in your rent. It’s a frustrating increase but not astronomical particularly if you rented at a lower price in the lockdown. Look up domain and see what the property rented for in 2019.

    Always try to negotiate but I doubt you have much choice if they won’t go lower. Either move out or pay.

    • Creamsoda on 28/04/2022 - 20:07
      +1

      yea you're right. our apartment is less than 10 yrs old and had so many maintenance issues when we moved in from dishwasher to leaky toilet/taps. those older ones usually are cheaper to rent but costs 2x more to buy usually over 1.2mil around the botanic gardens.

      Domain has the south yarra avg 2 bedroom unit rental price at $485 so we didn't pay a bargain price during the lockdown. i guess i'll go with my gut feeling and just move, don't want to deal with landlord like this in the future.

      • drfuzzy on 29/04/2022 - 00:53

        Which building? Looking at the average isn't very useful in South Yarra where the quality of the stock varies dramatically.

      • Quantumcat on 29/04/2022 - 06:28

        don't want to deal with landlord like this in the future.

        Every landlord will increase the rent regularly, so you aren't achieving getting a better landlord by moving. Why not try to negotiate first? That has to be much better than the hassle of moving. If you don't get a satisfactory outcome you can still move. But you might be able to talk the landlord down to a smaller increase that you don't mind.

        • idonotknowwhy on 29/04/2022 - 10:55

          Not really. I've only had 1 landlord regularly increase rent. Some of them don't even increase it for years.

    • [Deactivated] on 29/04/2022 - 04:12
      +1

      older houses also tend to be better built, with much better sound insulation than newer houses. out of all the houses i've lived in (10 +) the new builds were the worst ones to live in, you can hear conversations rooms away, people walking around sounds like elephants having a jumping competition because all the inside walls and floors are hollow with no insulation. i would rather live in a shack that isn't pretending to be something it's not, at least it wouldn't be an eyesore like new builds almost always are.

  • Muzeeb on 28/04/2022 - 18:37
    +4

    apartment in South Yarra

    I've discovered the problem

    we like the area

    No shit!

    prefer not to go through the trouble of moving.

    The place is apparently tiny. Just box your junk and move. If you decide to stay them just pony up the lazyman tax. FFS we have no idea about your financial situation to make a call on this one. Make a decision with your partner and run with it.

  • pantsparty on 28/04/2022 - 19:30
    +5

    If you have done your research and $585 is more than you are willing to pay for the apartment then move. You didn’t really need us to tell you that.

  • cimrak on 28/04/2022 - 20:09
    +1

    check your rental contract. Some, like mine, stipulate that any rent increase isn't allowed to be more than $35. I've seen others mention a max percentage increase.

  • CyberMurning on 28/04/2022 - 20:44

    Check your wallet

  • SydBoy on 28/04/2022 - 21:05
    +5

    Move … Landlord will lose

  • jaybmate on 28/04/2022 - 21:07
    +3

    As someone said above, if you're happy to accept the move, try negotiating first, hard. Ask if $510 or 520 is OK. They'll understand you're serious about moving and then may still possibly accept, or offer something closer to what your expecting. If they don't budge, well then you were planning on moving anyway.

  • striker5950 on 28/04/2022 - 21:21
    +1

    everything is going up, so will rents

  • Ronerrlaw on 28/04/2022 - 21:53
    +3

    I would take the rental prices advertised realestate.com.au, with a grain of salt. Alot of rental applications are alot higher offer to secure a place, as tenants are paying well above market rates.

    Also the agent could be increasing the rent as their fees are usually a % of total rent.

    If you can secure a place cheaper that is better, than move. But also try to negotiate with the landlord, not all of them are bad.

    On a side note, new apartments are not always better to rent as when you do move out the agent will try to hit you up for new paint, floors, or anything to keep your bond when they do an exit report.

  • Ciderfizz44 on 28/04/2022 - 22:14
    +1

    You overpaid in the first place, never expect goodwill from a landlord. Cut your losses & find a cheaper one.

    • alienurbanite on 28/04/2022 - 22:29
      +1

      I tried the same tact last year…. the tenant got a great deal on our place for 12 months. When we renewed… they didn't seem to have any good will in paying us extra for our losses the year before. Damn bastards….. oh wait. I think this is called business.

      • Ciderfizz44 on 29/04/2022 - 14:12

        Exactly, either party will try get the best deal for the lease term, don't expect anything more or less beyond that.

  • alienurbanite on 28/04/2022 - 22:27
    +1

    Landlord here with a house we are renting out in a similar area. We will be increasing our rent when this contract comes up. We rented it out for less during the pandemic as we were in a rush to move to our new place and thought it would be hard to rent out. Our house got rented out within 24 hours at the at the discount price which was reasonable for the time. The rents have gone up significantly in the area and so has our new fixed interest rate. I will be passing that down to the market.

    If the tenant doesn't want it that's fine. I'm prepared to take a few months of no rent (which I doubt will happen given how quickly it went last time and the lack of supply currently for what we have in that area). And if I do lose a bit of money, its tax deductible from my income.

    Just putting it out there from the other side. Landlords have outgoings too and we have business decisions. I don't see rented out my place at what the market will be bear as being "greedy". Similar to I don't go to 7/11 and yell at the guy at the counter that my can of Pepsi is cheaper at Coles. Business is business and the free market will dictate the prices.

    • Talonparty on 28/04/2022 - 23:18
      +5

      It's not the market, it's people and families being pushed to the brink. You can abstract it if you want but you're arguing for why people shouldn't think less of you for pushing vulnerable people to the brink.

      • Quantumcat on 29/04/2022 - 06:32
        +1

        It is the market. People and families need to eat too, do you go to supermarkets and complain they are being greedy because they raised the price of food recently, and food is an essential need? Costs go up, so they have to pass that along.

        • Talonparty on 29/04/2022 - 23:13

          We can have a separate argument about food security, sure.

          This is a self defence mechanism, people don't want to be the problem, they'd rather believe that it's all out of their control. Hence the argument that the market dictates. But that's not true. The landlord makes the decision.

          This isn't a coffee I can go without. I need a house. If you all decide to raise the price…I really have no choice. These are the decisions that push families out onto the street and living in their car. It is perfectly understandable that someone might not want to take responsibility for this and will tell themselves that the market forced their hand. It still doesn't change the fact that it's an individual choosing to maximise their return at the expense of someone else's fundamental need.

          • Quantumcat on 29/04/2022 - 23:47

            @Talonparty: You don't really have any argument. Just because someone needs something doesn't mean that it needs to be given for free or cheaper than other people are paying. I also need clothes but clothes shops won't give me free or discounted clothes because I don't want to pay what they're asking. They'll just sell them to the next person that comes in. Do you think clothes stores are greedy because they'll sell a t-shirt with a brand name on it for three times the cost of the same but plain t-shirt, and people need clothes? Are power companies being greedy when they increase the price of electricity during periods of peak demand even though people need heat when it is cold?

            • Talonparty on 30/04/2022 - 05:00
              +1

              @Quantumcat: I haven't said that people should get things for free. I've said there are different discussions to be had about how to meet other fundamental needs like food insecurity or, now that you've mentioned it, clothing and electrical needs.

              I have many choices of food and clothing. I can even go without a meal or wear old clothing or second hand clothing. Housing isn't the same. It's much more inelastic. I can't go without it and if I had spare or old housing I wouldn't need to rent. Landlords who decide to put up their prices simply because they can will inevitably cause someone to miss out. I'm not sure why you're ignoring that point and instead focussing on irrelevant nonsense.

              • Quantumcat on 30/04/2022 - 07:56
                +1

                @Talonparty:

                Landlords who decide to put up their prices simply because they can will inevitably cause someone to miss out.

                There's still nothing special about housing. There is a limited quantity, pricing going up when supply is limited means that everyone ends up with a place that mostly satisfies their needs - everyone just shuffles down a bit on the housing quality ladder. If prices were artificially lowered, it would just mean that first come first served might get the houses that are nicer, and a family that is a bit slower ends up with a house that REALLY doesn't fit their needs.

                For example say under good circumstances a family of 5 gets a 4 bedroom house, a family of 4 gets a 3 bedroom house, and a family of 3 gets a 2 bedroom house.

                If demand is high and prices go up, the family of 5 can't afford the 4 bedroom house anymore so they take the 3 bed house and have to make do and two of the kids have to share rooms, and the same with the family of 4 in the 2 bedroom house and the family of 3 in the 1 bedroom house.

                If you artificially set the price, now the 4 bedroom house is affordable to both families but the family of 4 grabs it first. The 3 bedroom house is affordable to the family of 3 as well and they grab that first. The family of 5 gets stuck with the 2 bedroom house and are pretty miserable.

                Obviously there are a lot more people than this, but it means that the nice houses will have a flood of applications and you'll have nearly no chance of getting one. There is still the same supply shortage as what would have caused increased prices so there aren't enough to fill the demand for them and you'll probably end up with something that doesn't meet your needs at all because those are the ones that no one wants since really good ones are affordable.

                Whereas if prices rise, there's a more even spread of demand as people try to get the best house they can afford, which will be different across all the spread of people, instead of everyone being able to afford the best places.

                Not having artificial prices is a good thing.

                If you want housing to be fairer, you should be advocating for the government buying more housing and turning it into social housing, not complaining about individual landlords who are only responding to the market that the government has created by not investing in social housing.

      • burningrage on 29/04/2022 - 21:55
        -1

        You are also not taking into account the massive "punishment" this Govt made upon landlords:
        1. The compulsory "safety" inspections costing over $700 per annum
        2. The fact that rents didn't have to be paid during moratorium, causing landlords to absorb massive losses.
        3. Introduction of over 130 tenants reform to "strengthen" tenants' rights at the expense of landlords. https://www.theage.com.au/national/victoria/call-for-covid-1…
        4. Next year, more changes on 29 March 2023 = more costs.

        And people now wondering why price goes up? Even the REA I spoke with said in the last 2 years since the "punishment" started, the number of people leasing out have dropped.

        • Talonparty on 29/04/2022 - 23:16
          +4

          The price goes as high as it can, regardless. All of these cost can be negatively geared thanks to the decisions of the government. This person is arguing that they'd leave the place vacant rather than accept a tenant can pay no more. I don't see how your complaints really make any point.

          Are you honestly telling me that if the place cost you nothing you'd pass that on?

          And I'd like to add, as one of the people being forced into perma-renter state…tenants rights suck. I live in fear of moving yearly and having to change my child's school so often. I earn enough to pay for a house in the old world of 3-4 x income but now I'm locked out. I can't have a pet, hang a photo or a shelf, paint a wall and why would I invest time in a garden I will leave. I have no connection to my community as I've moved 6 different suburbs in the past 10 years. Life as a renter sucks and more rights are a good thing.

          • burningrage on 30/04/2022 - 20:47
            -1

            @Talonparty: The point of my comment is simple.

            Cost is rising and many people dont pay rents anymore (rental moratorium). They need to recoup and now they can.

            Good on them.

            I am sorry to hear life as renter sucks but the reality is govt has made more than 130 changes in rental law all in favour of renters and over 15 new taxes on rental properties. The last one was the 18th which they then cancelled due to election this year. No doubt that will come back after election if Labor wins.

            It sucks to landlords too you know and thats why most landlords sold up.

    • drfuzzy on 29/04/2022 - 00:42
      +2

      Landlord here in your area (not your landlord) in same boat and have similar thoughts.
      The quality of the tenant will also come into the equation.

      1) How much damage has the tenant caused during the tenancy? Is it reasonable wear and tear or are they damaging the place?
      2) How many frivolous tradies have they requested?
      3) Have they paid their rent on time?
      4) Have they caused any other headaches?
      5) What is the market price for the property?

      Rent will be decided according to answers to above.

    • pompompom on 30/04/2022 - 21:27

      Seems like your friends friend rented his place for a bit more so now you have FOMO and have it going in your head that maybe a bit more cash in your pocket would be nice ? Sounds like plain old greed to me.
      7/11 doesn't increase prices because the local grocer started selling Pepsi for 10cents more, so not sure what you are comparing there. 7/11 however does sell things at a markup because it providesa 24/7 service. What does your apartment provide that a comparable appartment doesn't ?

  • Dack Smith on 28/04/2022 - 23:04
    +1

    Just move.

    Man wants his money

  • busyra on 28/04/2022 - 23:15
    +2

    We were in a similar situation last year. Landlord wanted to increase rent by 100 dollars. We were informed 3months before our 12month least. Consulted Fair Trading but they said everything was legal and had to justify that the rent increase was excessive.
    We negotiated for half the increase but owner won't budge. Ended up moving out as it is too much but this was difficult during lockdowns.
    Found out later that the same unit was advertised for half the increase we wanted.

    • [Deactivated] on 29/04/2022 - 09:24
      +1

      Maybe they just wanted you out??

      • busyra on 29/04/2022 - 09:41

        Probably.
        Checked this website afterwards and they have been having different tenants every year! They are doing the same every year.
        https://www.oldlistings.com.au/

        • [Deactivated] on 29/04/2022 - 12:55
          +2

          That's very strange. What benefit does that serve? If anything it incurrs costs to seek new tenants, not to mention no income from vacant periods.

          • busyra on 29/04/2022 - 13:55

            @[Deactivated]: It was strange. In the end of lease, agent asked us to use their suggested cleaner. Then wanted us to pay for some carpet damage. Fortunately we had pictures and we received the deposit back. So on the next time we seek a new place, we use that site above.

    • metallum on 29/04/2022 - 21:39

      For as many of these examples there is 10x the amount that the place is rented out for what the increase was.

      Most LL are not stupid, they dont want to risk a place sitting vacant for weeks obsorbing any possible $$ they would get from a rent increase. If anything, most allowing the renewing of leases at below market rate, as the extra $20 a week they get from a new tenant disappears with letting fees, advertising fees, 2-3 weeks vacancy.

  • javawoo on 28/04/2022 - 23:59

    Move easy

  • drfuzzy on 29/04/2022 - 00:35
    +3

    $585/week could be an absolute bargain if you are in one of the premium apartment buildings in South Yarra like Capitol Grand.
    Or it could be way overpriced if you are in a walk up unrenovated dump.
    We are just left to guess as you haven't said.
    Your landlord is running a business - it has nothing to do with being greedy or not.
    There are heaps of apartments in South Yarra for you to choose from if you are unhappy.

    • Creamsoda on 29/04/2022 - 00:57
      +1

      lol no its nothing like Capitol Grand. upon checking the previous rented pricing i found out the units recently sold in the same building but with a bigger layout and 2 bathrooms went for $600k.

      Yes, you are right, there is heaps of apartments around here. we've lived in the area for quite a few years. never had our rent increased so dramatically. like i said previously $500 for 2bed 1bath apartment with a small kitchen and layout under 10yrs old isn't heavily discounted price during the pandemic. you should know, since your a landlord in our area.

  • drfuzzy on 29/04/2022 - 00:37
    +4

    Have you been a pain in the backside to the landlord?
    What requests have you made while living there?
    It might be that the landlord wants a new tenant (if not, retain you with compensation for the troubles).

    • The General on 29/04/2022 - 16:48
      +4

      100% agree with this. Problem tenants are usually the ones to get their rent increased the most.
      Landlords can get sick of hearing petty complaints/requests to send trade people out to look at things that the tenant could have fixed in two minutes themselves.

      As a landlord myself, I have had tenants I have never increased the rent on after 5 years as they have never complained or made demands to fix anything that did not need it. And I have had a tenant that I bumped the rent up on as I got sick of fortnightly requests to send tradies out to look at things that were not broken. i.e. Air-con not working when it was, Ducted heating not working as they had covered up air intake, light bulbs they could not reach to change themselves etc etc etc.

      So you need to be honest with yourself, which type of tenant are you?

      • Sidor on 02/05/2022 - 07:20

        this

  • Oz em on 29/04/2022 - 04:32

    How many people are attending open inspections?
    Is it possible to get accepted for a new rental?

  • Boogerman on 29/04/2022 - 07:24

    If you want cheap rent move to the CBD

  • Aice on 29/04/2022 - 07:30

    I haven't looked too hard but and have no idea how comparable this is but….

    LG06/77 River Street, South Yarra, Vic 3141 https://www.realestate.com.au/property-apartment-vic-south+y…

    There are a bunch of other ranging from $460-640 per week for a 2/1/1.

    I've got rentals and one dropped $125 per week in rent and I'm no where near getting that back to pre pandemic levels but others are now higher as they are in more desirable suburban areas.

    If your a landlord you win some you lose some

    So in your eyes you may think it shouldn't go up but they may have been very motivated to get someone in and charged you a lot less and now things have turned around a bit

    If you can get something comparable for a lot cheaper I have no idea why you can't be bothered moving. This is OzBargain, we spend time on here to get the odd free don't or cheap beer, how can you not be bothered moving for $4k+….

  • Bob Svargis on 29/04/2022 - 08:03

    Leave. Move on.

  • HelpMeiCantSee on 29/04/2022 - 08:05

    I strongly suspect it’s the REA who is behind the increase

    • Stopback on 29/04/2022 - 15:37

      REA doesn't get much money back on 1k more rental income - much easier for them to have a tennant stay there and not cause a fuss

      • HelpMeiCantSee on 01/05/2022 - 08:30

        Nah, it’s a win win for them. The real money comes from getting new tenants. Rea has zero incentive to retain them. 1k for doing f all, or more if they leave. Easy money

  • ensanguined on 29/04/2022 - 09:07
    +1

    What a greedy mofo. That is a massive increase.

  • [Deactivated] on 29/04/2022 - 09:23
    -2

    Just contact Consumer Affairs, they can investigate whether the increase in reasonable. Easy.

  • Angryman123 on 29/04/2022 - 09:24
    -3

    85 *12 = 1020

    I would defs be having a look at other properties if a landlord did this to myself. No harm in having a look, if you can't find a comparable place for around the same, you can always stay at your current place

    • knitwear on 29/04/2022 - 09:46
      +6

      It's $85 a WEEK.

      That means its $4,420 per year, and who knows what shenanigans the landlord/REA might throw along the way.

    • Jason Genova on 29/04/2022 - 11:01
      +2

      do you even math?

      • Angryman123 on 02/05/2022 - 20:00

        85*52=4420,

        Close enough. you can buy many peanuts with 4k

  • knitwear on 29/04/2022 - 09:47

    Is our landlord ultra greedy?

    Well the "(profanity) you got mine" sentiment has been growing in the past few years or so…

  • payless69 on 29/04/2022 - 10:05
    -1

    There is a reason for everything: In the English language the name "Lord" comes from medieval times when there were Kings an pheasants.
    Recently I even stumbled upon an article that the French Revoloution was more of a failure. Hence Scotty's cancelled 5Bio order was perhaps because he never drove a French car.
    Back to the topic: Real Estate offices try not to answer calls anymore, instead ask tenants to read contract and use mail.
    Any attempt by failed greenies such as Simon Holmes A Court and BBS owners to install a LEFT government in hope to fix this will just widen the gap between rich and poor!

    • JimB on 29/04/2022 - 15:19

      A couple of years ago, they legally changed the term Landlord to 'Rental Provider'.

  • pogichinoy on 29/04/2022 - 10:22
    -5

    $500 pw rent is super cheap for a 2 bedder, let alone in South Yarra. You need to expect prices to return to prepandemic rates eventually.

    Move since nominal moving costs will be cheaper than sticking around. That is, assuming you don't include the cost of your labour of moving.

  • MontyMacaw on 29/04/2022 - 10:52
    +1

    Ask anybody who has been renting the same property for over two years if their rent went down when interest rates went down then check back when interest rates go up. You will likely see that renters get no breaks and always get charged more when rates go up. That’s capitalism for ya.

    • metallum on 29/04/2022 - 21:45

      Why would your rent go down with a drop in interest rates. Zero correlation between the 2. You obviously do not understand how the system works.

      • MontyMacaw on 30/04/2022 - 08:39

        I think I demonstrated that I do know. Of course nobody will reduce rents with lower interest. They will pocket the savings. This will then become part of their business model then when rates go up they will have the excuse to increase rents. That was the point of the post FWIW

        • drfuzzy on 30/04/2022 - 11:02

          OP is in South Yarra where gross yields are between 2% and 4% per annum. You make it seem that landlords are milking a cash cow when most are losing money holding after costs.

          • MontyMacaw on 30/04/2022 - 14:51

            @drfuzzy: You know it’s not that simple. Landlords are there for the money. They want capital gains and they want regular income. It’s not social welfare. My point was purely related to long term landlords who will have benefited from interest rates dropping and not passing those savings on to renters then the likelihood that for various reasons they will increase rents because interest rates rise. It’s a simple ratchet clause situation without the actual clause. Or to simplify, rents only go up during a tenancy and almost never go down except in cases of extreme hardship when some landlords being genuinely good people want to look after their tenants. That is the exception. Most would prefer a new tenant willing to pay more. It’s only natural. Especially when being managed by self serving property managers who take a percentage of the rent as their commission. Many landlords have used the lower interest rates to leverage their equity to acquire more properties. When interest rates rise there is only one way they can cover that and that is to increase rents. Property managers won’t take less commission you can bet on that!

            • drfuzzy on 30/04/2022 - 23:40

              @MontyMacaw: I don't think rents will rachet up lock-step with interest rates.

              The demand for housing will decrease
              - couples renting a 2 bedroom under financial pressure will downsize to a 1 bedroom
              - singles or couples renting a 1 bedroom under financial pressure will downsize to a studio or join a share house.
              - the upper middle class with a holiday home under pressure will rent it out for extra income

              Of course there are many permutations on this but the decreased demand for housing will put the brakes on rent increases…. eventually.

              • MontyMacaw on 01/05/2022 - 12:41

                @drfuzzy: I agree. You’re describing the market. I believe we are in unprecedented times where many people have extended themselves at the low interest rates in the hope of getting their capital gain ahead of increases in interest rates. The fallout could be distressed property owners who cannot afford the several hundred dollars a week increase coming in their mortgages in the next couple of years. Multiply that for speculative buyers who bought multiple properties and one of their levers will be to increase rents. A lot of vacant properties had rent reductions during the pandemic, especially inner city but they were leasing on short term leases just to get somebody in. Once those leases come up for renewal they will do what they planned all along and increase rents.

                • drfuzzy on 02/05/2022 - 16:06

                  @MontyMacaw: I think there is enough excess expenditure that people can cut back on before they lose their house.
                  I see the losers as discretionary retail, discretionary entertainment and leisure.

        • pogichinoy on 01/05/2022 - 15:15

          I haven't read all your posts but @metallum is right.

          Interest rates have zero bearing on the rental price for a property.

          Rental prices are entirely dictated by the income and demand of renters in the rental market.

          e.g. mortgage repayments for the property is $5000 per month. Renters are only willing to pay $4000 per month for the property. A very similar property has repayments for $6000 per month. Renters don't care because it'll only fetch $4000 per month in the market. Landlords can ask for more but if no one bites, it'll sit there empty and they'll bleed more.

          • MontyMacaw on 01/05/2022 - 18:46

            @pogichinoy: I’m not saying rents should go down when interest rates go down. I’m merely hypothesising the theory of being fair. If it’s a valid reason that rents go up when interest rates go up then it should be fair for them to go down when they drop. I get the market won’t do that but the net effect is tenants are at the mercy of bad investors who as a group will increase rents to recover their perceived increased costs of interest rates going up. Property managers will use increased interest rates to encourage property owners to increase rents when interest rates rise because it’s good business for them. There are many factors that go into the equation but if most mortgages cost more it would seem logical to see landlords trying to claw back that increase from tenants. Interest rates affect everybody paying a mortgage and a high number of landlords will leverage their properties to increase their stock because that’s what banks encourage. There is the real problem. And who collects the interest?

            • pogichinoy on 01/05/2022 - 19:16
              +1

              @MontyMacaw: Ok I understand your thoughts now.

              That's a lot of IFs. But the beauty of the free market is that not property managers and LLs are at the same stage of their investment property. Despite some claiming to raise rent due to higher interest rates or other market forces, there will be some that don't. Vote with your wallet and let that LL bleed as their rental sits unoccupied.

              Again, interest rates are not tied to the advertised cost of a rental. They can try, but if enough renters say no, then they have no choice but to drop their rent to something more competitive.

  • idonotknowwhy on 29/04/2022 - 11:02

    thinking paying regular pre-pandemic rates will likely to get our lease renewed

    There's no loyalty when renting. Assume the landlord will do whatever they can to take earn as much money as possible.
    You don't owe them anything and they don't owe you anything.
    I moved during the pandemic and saved $60 / week in the same complex.

    If my rent goes up by $10 / week, I consider the costs of moving vs the $520 / year and decide if I should move.
    For $4000+ and if you say you can get another apartment for $500, I'd move for sure.

    You've put 2 questions in the pool with Yes or No answers lol.

    Is our landlord ultra greedy?
    No. As long as they're not trying to scam you out of your bond.

    should we find a new place or even try to negotiate the rent?
    Yes to both. How much does it cost you to move house.
    If it's about $1000, then accept a $20 rent increase. Maybe even $30 if you really can't be bothered moving.
    If they won't go that low, I'd move.

    P.S. Some of those $500 apartments in the new high rises there are tiny and the elevators are congested in the morning on the way out to work :(

    • Creamsoda on 29/04/2022 - 13:16
      +2

      we've stayed in another apartment for 4years in south yarra and the rent were only increased twice with amount of $10 each time. There is currently 3 other units in our building for rent 2 of them under $550 with double bath and bigger over all layout, a top floor unit with a view thats asking $600. i think $510-$520 is a fair price for our place and you're right the lifts are pretty bad in our building worse than our previous aparments. newer apartments built in the last 10 years is horrid with cost cutting, cheap materials and small layout.

      • Webber000 on 30/04/2022 - 10:14
        +2

        Reply to agent saying you will pay $510 or otherwise you will move.
        Seems like agent and LL are trying to be greedy and just hope you are someone who will pay as they don't want the hassle of moving.
        If you pay $585 then it sets the tone for you paying $625 next year when it renews! Or you're just going to have to move next year anyway. So may as well counter low, accept $520 if thats what they counter back (but my gut says they will say $550 or just ignore you and then serve notice), or just move now as you'll be moving next year anyway.
        Chances are, sadly, in many areas they will be able to rent it for $550+ as someone will be willing to pay it - and may think like you that it won't go up much next time (but it will!).

  • Waltervp on 29/04/2022 - 11:17
    +3

    This is why owning a home is the Australian necessity. We get forced out. We need proper tenancy protection. This causes homelessness when people can't find a place to live and can't find affordable rent. Makes me angry how they call it the Australian dream, and instead of keeping homes affordable they give SOME people help to buy over priced realestate making the prices go up further. Vote1 wally… :)

  • kaleidoscope on 29/04/2022 - 11:32
    +1

    we like the area and prefer not to go through the trouble of moving

    Thats for your convenience and not landlord's problem.

    They are simply making a business decision. Banks are very likely to increase the interest rates in couple of months time and they are doing this in advance to protect their investment. You should try to negotiate your way to a reduced amount that you're okay with and if it doesn't fit the bill get packing.

    • duchy on 29/04/2022 - 14:03

      Spot on. It’s nothing personal.

  • zooter on 29/04/2022 - 12:48
    -1

    actually, try to negotiate for $485 a week. this shows them you're serious about moving out. He'll be left holding the bag as rental demand would be low and he would spend $$$ trying to find somebody even at $500

    • Qazxswec on 29/04/2022 - 14:17
      +4

      ummm.. they already pay $500, negotiating for $485 would make them seem insane, and rental demand is at a record high, everything you said is nonsense

    • Jason Genova on 29/04/2022 - 14:28
      +1

      lol rental demand is not low

    • kaleidoscope on 29/04/2022 - 16:05

      How to be homeless in 7 days or less

    • tallkid123 on 29/04/2022 - 16:29
      +1

      As a landlord, if you tried to do this in a rental market where comparable rents were above $485, I'd advise my property manager to not renew your lease and start looking for a new tenant.

  • bobolo on 29/04/2022 - 16:00

    Market rent is market rent. Market rent is based on what comparable properties are renting at any particular point in time.

    Tenant renting lower than market rent = unfair the landlord
    Tenant renting higher than market rent = unfair to tenant

    Simples

  • Drakesy on 29/04/2022 - 16:09
    +1

    Interest rate rises are going to trap these property investors in a negatively geared property and they'll complain to their local politician that all of a sudden their rigged market is unfair.

  • dirtybigbjelke on 29/04/2022 - 16:23

    Negotiate. Point out that if you move out it will cost him Agents fees outgoing and incoming and lost weeks of rent. He will take over a year probably to make that rent increase back after the fees. Assuming he used an agent?

  • xavster on 29/04/2022 - 16:51
    +2

    Hello!

    I want to just address some of the reasons why your rent has gone up! It is purely due to supply & demand. You see, during the pandemic, a lot of investors exited the market, some have come back in recently but not by much, and probably wont anymore as the interest rates are increasing soon.

    During the pandemic so many tenants gotten eviction moratoriums and rental protection, they decided since they were protected anyway, why bother paying rent? I had one tenant, that decided to move in, pay 2 weeks bond and 2 weeks rent and then never paid a cent for a year. Just sat there collecting 1500$ JobKeeper. As an investor and landlord, there was nothing I could do, the government provided zero protection and I had to take the hit. Now I know that, as an investor there are risks, but we didn't expect to be thrown under the bus like that. And many investors felt the same.

    As a result, investors exited the market, realising the government will not provide any support and was willing to throw them under the bus. I myself have taken 2 rental properties off the market and decided to sell and realise the capital gain and de-leverage. With so many rentals now no longer there, the remaining rental stock is being fought over. One of my properties, I put up the for lease Ad on Tuesday, got multiple inspections booked on Thursday, and was leased on the first inspection that afternoon. I had to call 13 parties to cancel their inspection booking and wish them luck in their search.

    On a macro level, this is what is happening, the pandemic, actually the government's response to the pandemic has signalled the market, and as a result the market has now removed a significant portion of rental stock.

    Without a large portion of investors coming back into the market, there just won't be many rental properties available. Unfortunately with the increasing interest rates that are coming, existing investors will need to raise rents to cover the cost of debt. Given there are so few rental properties on the market, the investors do have pricing power.

    tl;dr. rental demand is about the same, but supply has left the market. Reduced supply equals higher prices.

    • idonotknowwhy on 29/04/2022 - 18:18

      Correct me if I'm wrong but:

      decided to sell

      With so many rentals now no longer there

      So you sold them to someone, who will either live in them (one less renter), or rent them out.

      I had one tenant, that decided to move in, pay 2 weeks bond and 2 weeks rent and then never paid a cent for a year.

      That's pretty (profanity) up. Surely now they won't be able to rent anywhere because your agent will tell the next landlord when they move?

      • xavster on 29/04/2022 - 19:03

        I originally thought that too, but examining the housing market as a whole I started to see the macro situation.

        When the boarder restrictions were removed, immigration started to flow and our migration population will grow as a result, they will be competing with the local population that couldn't afford to buy. Unfortunately that is usually at the lower end of the rental market.

        The properties that I sold were in middle and outer ring suburbs. They were sold for $840k and $750k.

        The people that called to inspect the property that I advertised were mostly from Asia (Japan, Thailand, China) I had one Aussie and he was moving to Sydney from Queensland for a new job. My new tenant is Chinese.

        • xavster on 03/05/2022 - 15:56

          For those that are interested, the ABC just did a news report confirming my macro real estate observations of active owner occupiers take existing rental stock out of the market.

          https://www.youtube.com/watch?v=z3RwCWNRZQw

    • burningrage on 29/04/2022 - 22:00

      Don't forget to add the "punishment" laws on:
      1. "Safety" subscriptions and
      2. More pain to come 29 March 2023.

  • htc on 29/04/2022 - 17:54

    Sound like landlord wanted to sell without tenant or wanted the apartment back. So raise a ridiculous price, if you pay, landlord win, if you don't, landlord must have better plan.

    • idonotknowwhy on 29/04/2022 - 18:19

      Sound like landlord wanted to sell without tenant or wanted the apartment back

      Why wouldn't they just give the 60 days (or whatever) notice of eviction then?

      • htc on 29/04/2022 - 22:01

        It is like some tradies, they don't want to do your work but give you a ridiculous quote hoping you won't take it.

  • OzHunterNSW on 29/04/2022 - 18:05

    To where?
    If you feel it unfair you take your landlord to Tribunal and argue the case that it is excessive in this current environment.
    It is up to the LL to answer themselves to your claim

  • FlyingMiffy on 29/04/2022 - 20:44

    It's not free for the landlord to change tenants either, so there's probably some wiggle room for the OP to negotiate if they want to stay. There's re-advterising, letting fees etc, which is usually around a month worth of rent and the change over lull of an empty rental til the new tenants can move in - you can start from there. That said, the market is changing and with interest rate movements, there's a gamble on how and if you want certainty on your weekly payments sooner or later.

  • gstfree on 29/04/2022 - 20:46

    Big price increase and decrease is normal. My rental property was $560 per week prior to pandemic, and reduced to $350 in July 2020. Now the market is back, advertised rental increased to $480, and there are demands for $500 per week.
    If we think the rental is overcharged please tell the agent and try to negotiate a fair deal. Otherwise please notice to vacant.

  • PerthMan96 on 30/04/2022 - 08:48
    +1

    Move to Perth and get your own home for 500 a week

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