Should Rents Be Capped?

Lhawkshead on 29/12/2022 - 11:33
Last edited 29/12/2022 - 15:58

I dont really understand finance, so there's probably some big brain banker who thinks different.

Why is my rent going up because my landlord's mortgage is going up?
I didn't take out a loan on a home I won't live in. I'm not getting more house, im not getting better services? they havn't improved the house in any tangible way.

I think if rents were capped based on objective features of a house like rooms, amenteties, idk water efficiency? like actual tangible definable things it would be good for people.

I get that might mean that investors can't afford their mortgages, but why are we basing housing on the reckless financial decisions of investors? if you can't afford that 2nd or 3rd property maybe you should just sell it? and not make tennants pay for what you can't afford.

The banks and landlords have had decades to tackle homelessness and they havn't. Maybe their way isnt actually good.

Maybe this would just have aweful consequences though. So apart from rampant greed what would go wrong with capping rents?

(EDIT) I really appreciate the perspectives and comparisons between attempts in other parts of the world as a way to explain things. Keep em coming.

Poll Options expired

  • 89
    Cap rents based on objective features of a property
  • 601
    Don't cap rents based on objective features of a property
  • 11
    Cap rents based on things like income amounts
  • 13
    Don't cap rents based on things like income amounts
Financial Rent

Comments

      • HannahBanna on 31/12/2022 - 10:45

        I went through the same thing.

        Middle of the pandemic when evictions weren’t allowed, landlord decided to evict us because they wanted to demolish the property and build a boarding house.

        In the 90 day notice we had we were constantly being harassed to move out earlier because they wanted to start construction early, they wanted to take the carport out before we’d even had 30 days notice of your our eviction.

        They came out and cut down trees, turned off our gas, even got rid of our mailbox.

        I had no issues with them wanting to demolish their house, it was an absolute slum but to find out that we’d lived in that crappy house for 2 years with a leaking roof and a gas heater that leaked exhausted that they had more than enough money to fix the issues, they just didn’t want to… well it pissed me off immensely.

        And to do it in the middle of a pandemic just sucked.

      • Aneurism on 02/01/2023 - 01:41
        +1

        The definition of rich could differ from person to person and is highly subjective.

        That being said, your line of thinking is in alignment with snowflake victimhood whereby inaction and victimhood are the only methods of action.

        How about shifting your view point such that you position yourself to learn to use the same tools that is available to those who are successful including using braincells. If you want to change your life for the better, do something. Don't just wish for the lotto to come your way.

      • Ghost47 on 02/01/2023 - 01:46

        The effects of high house prices is not good for society as a whole and that’s my issue with it. But no one seems to be able to realise the effects of what high house prices is doing, and will do to our country going forward. Everyone is just blinded by greed and money.

      • Dogsrule on 06/01/2023 - 10:25

        The ‘experts’ have been mostly wrong ever since housing prices started climbing above general inflation around 1997. Housing prices will continue to climb as long as there is high global demand for it. Australia is a ‘lifestyle superpower’ - many wealthy people from around the world desire to live here, so their capital will continue to flow into our housing market, buoying prices.

        Sure, the irrational prices due to Covid money printing may subside, but that will just bring prices back to early 2020 levels. The fundamental value of the market as described above hasn’t changed at all. The only thing that could change that in the short term is some kind of nationalist political movement whose goal is to severely restrict immigration, and I wouldn’t be betting on that any time soon.

  • GuitarXXX on 30/12/2022 - 22:06

    Because this is a "capitalism" system and you don't own the capital, which is the house, here

  • Eeples on 30/12/2022 - 22:47

    Friends of mine complain that the real estate managing their investment property continues to suggest to increase the rent.

    Do real estate agents managing property have a motivation to increase rents?

    • JohnSy on 31/12/2022 - 01:16

      To some degree, since their management fee derived is generally a % fixed of the rental figure.

      • CowFrogHorse on 31/12/2022 - 16:45

        Unfortunately owners are always going to go the real estate that promises them more.

    • UFO on 31/12/2022 - 19:57

      Your friends need to understand what "market rent" means. If their manager reckons they are under market, they are giving money away at the moment.
      They don't have to increase it of course, but I bet they'd stop to pick up a $100 note laying on the ground. They are either running a charity, or running an investment. No one is giving them any special awards to not increase rent to market. No special access pass to heaven.

  • Morphio25 on 31/12/2022 - 00:14
    +1

    if you can't afford that 2nd or 3rd property maybe you should just sell it? and not make tennants pay for what you can't afford.

    Why should an investor be forced to keep the rent price the same just because you haven't made good financial choices that led to you purchasing a property of your own?

  • [Deactivated] on 31/12/2022 - 02:35

    Rents are based on who is willing to pay them. If you're no longer willing to pay the market rate, someone else will.

  • Bludgeman on 31/12/2022 - 06:21
    +2

    The government should mandate basic finance as part of our education. Aside from the ozbargain community(less OP), the general population have little to no understanding of money. Working till you're 65 because you have no other choice, as a result of a lifetime of bad financial decisions is literally slavery. Even a 10 minute crash course before you turn 18 would make a world of difference.
    - Get a job & make some money.
    - Save money and make that money work for you.
    - Learn the flip game
    - Don't buy stupid crap you can't afford
    - F what everyone else thinks of you and fancy brands
    - Be comfortable taking risks
    - Orbargain4lyf

    • Ughhh on 31/12/2022 - 07:49
      +1

      Honestly, I would put most of those under common sense, especially for anyone who is old enough to be eligible for a loan. You can only tell someone so many times that Netflix or the newest iPhone isn't a 'need'.

      • brendanm on 02/01/2023 - 16:36

        Have you seen how many people have common sense these days?

    • leiiv on 01/01/2023 - 16:29
      +1

      The ruling elites want the general populace to be smart enough, but not "smarter". Basic finance education won't do shlt, advance finance on the other hand, if widely taught, will be revolutionary. That would include how capitalism and banking system works, share markets, trusts and companies, and any loopholes and other known tricks people use to game the system.

  • pygar on 31/12/2022 - 08:01

    As a society we need to make a choice. Do we want to treat residential property as a speculative investment class asset or not?
    We could say that due to the high amount of capital required to enter the property market, and their social utility as places to live, that residential property is unique and should not be treated like "any other investment asset".
    We could decide that affordable housing is too important to the health of society to continue with the tax concessions that fuel speculation on investment properties.
    We could.

    • UFO on 31/12/2022 - 19:53
      +2

      You're right. Let's remove all incentives to own a property to rent it out… for the greater good.

      And then what do you think all these investors will do? The very first day you remove tax breaks, they sell up. The very first day.

      All these "affordable" homes flood the market in the short term. Will renters buy them? Of course not, they can't.
      Except now there are no homes to rent (or at best very few). Who do you think gets those homes as a tenant? The very cream of the crop… the high disposable incomes that are prepared to pay for that rarer than hens teeth property. What happens to all the other renters?

      You're looking at the whole market with rose tinted rental glasses, without realising the strife people will be in if there was fewer rental properties.
      Do you think the government is going to build millions or government housing properties? Who's paying for them?

      You're right on one thing though… society DOES need to make a choice. Remove investment properties all together and force millions of people onto the street, or increase incentives for more (much more) investment property choice. More supply equals cheaper rents.

  • HannahBanna on 31/12/2022 - 10:37

    Personally I’d like to see social housing managed better.

    You have people who are renting large 4 bedroom houses for next to nothing, they have no kids anymore because they’ve all moved out but as one or two people they still occupy these massive houses that are needed for younger families because they feel entitled to the house.

    Once your kids move out you should be forced to downsize. If you’re going to rely on the government for handouts then you need to abide by their rules.

  • afah0447 on 31/12/2022 - 11:16
    +1

    Welcome to Capitalism. It is not designed to be fair.

    The less money/wealth/capital you have the more inequitable capitalism appears, the more capital you have, the more it seems like the most efficient and perfect system for running a society and distributing resources.

    More specifically to your question. The theory and practice is that the 'market' will account for your demands via the price or rental amount asked. If not, the price will have to be lowered until someone out there agrees. Right now there is little supply and housing quality is crap, too bad, you will have to pony up and pay because if you don't someone else is willing to.

    Now in theory there are 'safeguards' in Capitalism to account for externalities and safety, but they have been largely legislated away as those with massive amounts of capital see these as impediments to accumulating more capital and dont directly affect the owners of capital anyway. These negative affects massively impact those with little capital, so they dont care.

    Governments play a role in countering the negative aspects of Capitalism, but since the 1950s, again, those with massive amounts of capital simply tell the government what to do via influencing (telling them) the laws they can create that which affect their capital and how they accumulate it.

    • CowFrogHorse on 31/12/2022 - 16:44

      The gov should tax foreign investment at such a rate they would basically give up or actually give money to the gov to help australia, instead of being parasites who pick and suck as much as possible without actually contributing to society in a positive way.

  • morebunnings on 31/12/2022 - 13:51
    +2

    Your rent doesn't go up or down based on the landlords mortgage (unless the landlord is very very nice and severely under renting his property).

    Rent is determined by the market. Currently the housing market is stuffed, with super high demand. For the last couple years on the sunshine coast, you could go to a rental property open home and there would be 20 people there, some offering the property manger more than what they were asking. This drives up the price, because there is not much supply.

    If you could, you'd move out and rent some where else that's cheaper. But I'm guessing nothing cheaper is available, because (surprise) your rent is being increased to what the current market is.

    God knows what the gov is going to do. Lowering mortgage rates wont solve the problem (it was here when mortgage rates were low too).

  • CowFrogHorse on 31/12/2022 - 16:43
    +1

    The real cause of the problems in the rental market is the governments policy to allow foreign investers along with tax benefits for investors..

    Stop both of those will slow everything down and allow all Australians to live a peaceful life with far less money grubbing.

  • kokita on 31/12/2022 - 17:14

    All roads lead to increasing real estate value and rent. Especially in Sydney.
    Good luck.

    Want to make a change? Jump into politics. In the end you will learn all roads lead to the same end again.

  • cnrmlj on 31/12/2022 - 17:25
    +1

    LOL. No, rents should not be capped comrade.

    • Eeples on 31/12/2022 - 19:31

      Rent control is a thing though… New York City has perhaps over a million apartments that are rent controlled,

      (Or are they communists too?)

      • UFO on 31/12/2022 - 19:46
        +2

        Seen the quality of those rent controlled apartments?

        If you demand a property meets building codes, has insulation, has air conditioning, has no pests etc etc etc… then that comes at a cost.
        You can't have quality properties and cheaper rents. It's one or the other.

        If you're happy for minimum building standards to be dropped, have rent control… no problem.

        • Eeples on 02/01/2023 - 01:34
          -1

          Rent control would be a driver for affordable housing. (Even if it is in the form of public housing).

          Having no rent control (as is the case with few exceptions in Australia) in which landlords can charge whatever they want drives high-end luxury housing; Is that what really needs to be built?

          • Fat Horny Ghost on 08/01/2023 - 05:17

            @Eeples: It drives to get built what the market demands in that particular area, so you will have the correct stock for that demand.

    • CowFrogHorse on 31/12/2022 - 21:12
      -3

      Have you got kids ?

      Do you charge them rent, do you make them pay you for food or a bed ?

      If you dont then you are a communist

      • brendanm on 02/01/2023 - 16:40

        Hahaha, that's not how that works. Are you being forced to provide them free rent and food? No, that is a choice.

  • shutuptakemymoney101 on 31/12/2022 - 17:51
    -1

    For some, struggling to pay rent now is a direct result of poor life choices.

    • Eeples on 31/12/2022 - 19:33
      +3

      Unfortunately life doesn’t start everyone off with the same kit bag.

      • shutuptakemymoney101 on 31/12/2022 - 22:07
        +1

        A person's poor work ethic or worse no work ethic at all isn't really my problem.

        Often in life you reap what you sow. My peers and I started off on the same footing, those who succeeded in life only did so through hard work.

        • Eeples on 02/01/2023 - 01:27

          Only through hard work?

          Luck and opportunities most likely played their part.

          Many ppl often downplay the role of positive factors in their lives such as; they’re parents providing a nurturing environment, their education opportunities, support from community and sporting organisations, role models, lack of tragedy and trauma, good health.

          No-one is self-made.

          • shutuptakemymoney101 on 04/01/2023 - 09:11

            @Eeples: The people I know who pull cones and play Xbox until the wee hours of the morning then get up after lunch - rinse and repeat, only have themselves to blame.

            Why shouldn't the blame for their lot in life be placed squarely on their shoulders?

          • pogichinoy on 04/01/2023 - 11:00
            +1

            @Eeples: Smart work, not just hard work.

            A majority of people's circumstances are a result of the choices they made in their life.

    • afah0447 on 02/01/2023 - 13:31

      Ok Ayn Rand. This is classic Conservative illogical and baseless in fact rhetoric. The old 'if you're poor, its because you are not trying hard enough'.

      My favorite was Joe Hockey's 'if you cant afford a house, get a higher paying job'.

      Because after all, all people are born equal and have equal access to opportunity to get ahead!

      • shutuptakemymoney101 on 04/01/2023 - 09:15

        Are you trying to tell me that everyone 'struggling' is somehow due to them being born without equal access to opportunity? Absolutely no one in our society has made poor life decisions which has now lead to their situation?

      • pogichinoy on 04/01/2023 - 11:01

        We all have equal access to opportunity.

        People's circumstances are a result of the choices they made in life.

  • UFO on 31/12/2022 - 19:44

    I'm actually pleased there has been such a strong response to this poll NOT favouring rent caps.

    I don't think the OP understands the simple principle of supply and demand. Putting caps on rent won't help renters, because all it'll do is remove even more rental properties from the market. The sole reason rents are so high is because demand is far outstripping supply. The reason for this is investors are fleeing the market.

    The rules in regards to renting a property out have gone so far in the tenants favour that even after a fixed term has expired, a landlord now has great difficulty in testing the market or finding a better tenant. And then god forbid rent is actually paid in the first place. It's any wonder people are choosing to rent their properties via short term arrangements like AirBNB. At least that way the owner of the property can *gasp, have control of who lives there and at what price!

    More rental stock means cheaper rents. Its a very basic equation that renters don't seem to understand. They push and push for a 'better deal' and all the while ignore the fact that like any product or service, less competition (available houses) means the market rent for that particular property increases.

    Thankfully the vast majority of pollsters see the problem for what it is. A private property owner is NOT a charity.

    • Eeples on 31/12/2022 - 20:56
      +3

      The problem is only treating housing as an investment vehicle or as just another commodity. This doesn’t sit well with a kind society which might believe everyone should have a roof over their head.

      • noxas on 02/01/2023 - 04:48

        Housing shouldn't be an investment in the first place. Do we want to end up like China where housing is seriously unaffordable?

        • May4th on 02/01/2023 - 20:41

          You mean like London HK Toronto Auckland and every other world class city?

          • noxas on 02/01/2023 - 21:51

            @May4th: Not so sure about world class. But it's unsustainable.

            "This is leading to a real problem of underused and vacant housing, rampant speculation, and skyrocketing prices. Homes are for people, not investors."

            https://www.abc.net.au/news/2023-01-02/canada-bans-foreigner…

            Wonder when will our politicians have the balls or the political will to do the right thing.

  • CowFrogHorse on 31/12/2022 - 21:15
    +1

    The real problem is the government and various business interests want a big Australia where nobody but them supposedly wins.

    More people in Australia is nothing but a race to the bottom. More people in Australia does not make the vast majority of people have a better life. More people for example means more wasted time in traffic, trains and so on. More people mean companies can abuse workers like the gig economy creating a low paid class of people. More people mean homes prices and rents will go up.

    There are no winners in this game.. Stop big australia and everybodies life becomes better.

  • ihbh on 31/12/2022 - 21:34

    I think if rents were capped based on objective features of a house like rooms, amenteties, idk water efficiency? like actual tangible definable things it would be good for people.

    What about the biggie location? How do you allow for that? And for the remaining factors, get some AI to calculate it? Or a valuer (who pays for it)? It's not easy with factors like painted 20 years ago to recently painted (with one or 2 coats of paint), but this is a cost to the landlord.

    The perverse incentive is that the landlord can do bugger all to minimise his outlay if caps result in him not getting his desired return (unique to each landlord) which results in a lose/lose situation.

    Why not let the market cap the rent? Also, in years where rent were flat or even reducing, did you put up a post/poll? Also, if you're not happy with your rent, why not move, … including to a smaller/further, etc. place?

    • CowFrogHorse on 01/01/2023 - 08:25
      -1

      And for the remaining factors, get some AI to calculate it?

      Theres no such thing as AI, all AI are biased heavily dependent on the program a human wrote and the data they are fed.

      Why not let the market cap the rent? Also, in years where rent were flat or even reducing, did you put up a post/poll? Also, if you're not happy with your rent, why not move, … including to a smaller/further, etc. place?

      Want another example of the market failing ?

      Take the 2 - 4 hour daily commute, is that a smart outcome that the market has decided ?

      Are the millions wasting their life in traffic, trains, boats, ferries ALL for no pay a smart outcome ?

      • ihbh on 01/01/2023 - 08:52

        Theres no such thing as AI, all AI are biased heavily dependent on the program a human wrote and the data they are fed.

        The point I'm making is that OP's proposal is hair brained. He's suggesting the what, but the devil is in the how.

        Take the 2 - 4 hour daily commute, is that a smart outcome that the market has decided ?

        1. That's individual choice (vs say living in Brisbane). 2. It's a possibly short term situation. Markets might correct it over the longer term.
        • CowFrogHorse on 02/01/2023 - 17:28
          -1

          That's individual choice (vs say living in Brisbane). 2. It's a possibly short term situation. Markets might correct it over the longer term.

          Might is a big word considering the world is full of cities and commuting in 99% of them only gets worse.

          Given those odds is hardly honest or smart to pretend the better thing will happen.

          The point I'm making is that OP's proposal is hair brained. He's suggesting the what, but the devil is in the how.

          THe answer is very simple.

          Stop trying to sell and make everything in life all about chasing money and that means stop trying to build a BIGGER australia.

          • ihbh on 02/01/2023 - 20:19

            @CowFrogHorse:

            Might is a big word considering the world is full of cities and commuting in 99% of them only gets worse.

            Given those odds is hardly honest or smart to pretend the better thing will happen.

            The future might be very different is what I'm alluding to. E.g. A universal basic income for all and the people that are working, work closer to where they live (that is, work will be more decentralised).

      • brendanm on 02/01/2023 - 16:43

        Are the millions wasting their life in traffic, trains, boats, ferries ALL for no pay a smart outcome ?

        They are free to move to a different town/city, or change jobs to somewhere closer?

        • CowFrogHorse on 02/01/2023 - 17:31
          -1

          No - the government should make incentives and penalties for businesses that force people to travel stupid distances.

          There are a lot of people that simply can work from home - dont be stupid and tell me plumbers cant work from home.

          Spending tens of billions on the metro for example in Sydney makes everyone go into more debt which means they waste even more of their lives working to pay it back. There is no need for the metro, there is no need to spend billions to send people to the Sydney CBD. It would be cheaper to buy all the businesses in the CBD and close them down.

          Problem is people have no imagination and just accept the stupidities of the rate race.

          • brendanm on 02/01/2023 - 17:59

            @CowFrogHorse:

            No - the government should make incentives and penalties for businesses that force people to travel stupid distances.

            No.

            dont be stupid and tell me plumbers cant work from home

            How would a plumber fix your sink from their house?

            Problem is people have no imagination and just accept the stupidities of the rate race.

            That's their problem. They are free to do something different.

        • zonra on 02/01/2023 - 17:37
          +1

          But you don’t get it. It’s basic human rights that everyone gets to live in the best areas in the best cities in the world for next to nothing.
          But in this utopia where everyone has equal rights to these very limited desirable spots, how do we pick who gets to stay there?
          Glad you asked, I propose we establish a bidding system, we’ll use the unit of “moolah” and people with the most “moolah” can call dibs on them. Sounds fair?
          But does that mean people with less “moolah” has less chance of living the prestigious life then? Well ofc my friends, if you want caviar for dinner then you gotta work your arses off.
          But I guess if they’re willing to spend a smaller amount of “moolah” to have these nice spots loaned out to them for a period of time from the original highest bidders, we could arrange for such agreements. We’ll call it “loaning out” properties.
          I think this new utopian system will definitely be an improvement over the current.. Oh wait..

  • echineon on 01/01/2023 - 12:28
    +1

    just chip in my 2c if rent cap is in effect, places with high demand location will still have high demand - this will definitely lead to "creative" solution to solve. Either corruption (if the local government making the call who gets what) or hidden decision making criteria, the people at the lower wrung will worse off for this as they have SFA to start with. The problem also compound to tax from this missing rent income will not be collected - society is worse off on this.

    On the other side of the coin, I see first hand account of vacation house bought in the craze of WFH 2020 making area like the southern highland and along the coast of NSW shorten the supply - ie. the renter that work and contribute to local community has nowhere to live. Again, taxing property that sits there doing nothing is a better solution. Also (profanity) AirBnB with the endless added fee and no responsibility for the property owner.

    /edit: also I strongly support community housing, the money goes exactly where it should - local economy. If someone comes to me about wah wah druggo mate, legalise the stuff, hit it where the money goes - if I'm buying some doobie I will buy regardless, but a shop that pay tax is better than money circulated back to drug dealer where that money will be used to do more harm.

  • benjaminbarren on 01/01/2023 - 15:08

    no need to cap rents as obvs once interest rates go down, rent will go down - not.
    rent goes up when interest rates go up, but (historically) does not go down when interest rates are low/decreasing.
    owners want renters to pay the whole house/unit off whatever ($m) price they bought it for and whatever the interest rate (%) is.
    game be rigged, same as it ever was just more pronounced now with no wage growth relative to property prices and rent.

  • R4 on 01/01/2023 - 16:01

    No

  • IWoNdEr on 01/01/2023 - 18:51
    +1

    My friend. Your need to buy an investment property and you will understand very quickly.
    It will also likely drag you out of being a life-long renter as pretty much the government policy is pro-property ownership.
    Cheers.

  • ben5000 on 02/01/2023 - 01:47
    +3

    There's a range of speculative opinions here but we need to first look at the causes to then address the problem. The catalyst for this monetary policy circus was the severe economic mismanagement during the 'pandemic' in the form of quantitative easing and shutting down businesses. Increasing money supply by vast amounts is pure idiocy for the economy which in turn resulted in massive inflation. When inflation is out of control and our cost of living has literally doubled in a 3 year period, they really have limited options to address that. Raising interest rates catastrophically was the chosen solution and even though it didn't fix inflation, it will at least help it stop getting dramatically worse. Rent caps wont do anything, except crash the housing market and possibly create a nationwide mortgage collapse. It's also not morally justified. Landlords need to be able to cover their payments.

    These are terrible times for anyone who is not rich. The wealth gap will widen more in this generation than any time in the last century. The Australian dollar is also extremely weak, making us poorer everyday in real spending power. The only people who win are exporters (mining/gas/coal/agriculture/livestock) oh and don't try tell me farmers are struggling, they are almost all multi-millionaires. I know many.

    Sweden never imposed a single restriction of any kind. Life continued as normal. There was never any need for all this hardship.

  • Landsmith on 02/01/2023 - 09:31

    Probably the biggest issue is house prices, which seem to be ever-rising. Regarding rental price caps, additional price caps would be required, including interest rate and house price caps.

    • Extreme on 02/01/2023 - 09:43
      +1

      And then there’s other issues that can come about, such as runaway inflation.

      Sure, your rent/housing costs might be capped. But what about fuels such as petrol/electricity/gas/diesel & as a result every other goods you purchase including food?

      The reality is, higher interest rates are designed to stop people spending. This includes higher costs being past onto tenants to stop tenants spending also.

  • JoeBlack03 on 02/01/2023 - 14:07
    -2

    Housing shouldn't be an investment, full stop.
    Investment properties produce nothing. If anything, buying extra houses is scalping. Even double scalping since you can make money (rent) while waiting to sell at higher prices.

    • life is suffering on 02/01/2023 - 14:48

      Same page but what other investment vehicles are there apart from stocks ?

      • JoeBlack03 on 02/01/2023 - 17:15

        Does it matter? I don't know, anything that produces value? You can invest in any kind of business, sometimes directly, sometimes via shares - which is a textbook definition of investment. Stocks is just the easiest way, quite speculative as well. That really doesn't matter, because place to live should not be artificially turned into a money making vehicle, it is not an investment - it is a speculative gamble that produces no value, hence it is not an investment.

        • brendanm on 02/01/2023 - 18:13

          Of course it's an investment. There is limited land available. If you purchase land, it is all but guaranteed that the value will increase, as people want it, and there is a limited supply.

        • Extreme on 03/01/2023 - 20:05

          Does gold or silver produce value? What about Bitcoin?

          The fact is, property(land) is a natural resource, that is limited.

          The reality is, for property, it’s mostly land values going up. Sure improved properties also go up too, but it’s mostly just in relation to building costs/inflation on those building costs.

          There’s plenty of cheap dirt out there, if you’re willing to buy where no one else is.

    • brendanm on 02/01/2023 - 16:46
      +1

      What will people rent if there are no investment properties?

      • JoeBlack03 on 02/01/2023 - 17:09
        -3

        Public housing. You can build to rent: in this case you produce service. Not just buying and selling, like a merchant with no value to society.

        • brendanm on 02/01/2023 - 17:18

          Where is the money from to do this? 2.9 million households are renters. Let's assume that the average price of these houses/apartments is $400k (this is likely way too low). 2.9 million X $400k is $1.16 TRILLION. That's assuming they are buying the houses that are already investment properties. If they want to build from scratch, you can at least double that, is the government is so wasteful with anything like this.

          I love how little thought people put into this sort of thing. "Just buy the houses lol. ROFL."

      • Ch34p on 02/01/2023 - 21:55

        If an investment property is sold, it is either bought by:
        another investor, so the rental stock out there is the same
        Someone downsizing/upsizing, so rental stock out there is the same assuming they sell their old place,
        Or a renter, so that would decrease the need for rental properties.

        … so what's the problem?

        • brendanm on 03/01/2023 - 10:29

          Those are not the only two options.

        • Extreme on 03/01/2023 - 20:08

          Or the kid moving out of mum & dads, or the immigrants….

          So it’s not always a 1 for 1 scenario. If it was, we wouldn’t be in a rental crisis.

      • pogichinoy on 03/01/2023 - 02:02

        The govt allowed IPs to exist because they know they cannot carry the responsibility of providing private rentals and public rentals.

        They’ve already fudged the latter.

  • 100KK on 02/01/2023 - 20:01
    -1

    Nuclear World War required - wipe out 90% of humans… only way to fix all problems in the world - there's simply no other way…. there's not enough "money" "power" and "resources" to go around and pretty much now everyone disagrees with everyone else on everything… we are all just individuals. End of. Sure maybe we'll be back at this point at some stage again, maybe in even in less time. Hopefully nexy time we will have more knowledge and wisdom on how to make the world a better place.

  • AuQld on 02/01/2023 - 21:01

    Usual story, people don't want to pay the going rate for a service. Expect some special treatment because they can't afford a certain house or certain area any more. Why exactly do you think people buy ?

    It becomes a political issue, politicians promise the world, get votes and then make the situation even worse. Everyone blames the landlords even when there none left to blame lol..

    • hawkshead on 03/01/2023 - 14:51

      Usual story, landlords take something people need to live, make no material improvement on it, then make others pay them for it. Is your dr or nurse a service? if your heart surgeon said they wont operate if you dont pay them for every subsequent beat would you complain?

      • brendanm on 03/01/2023 - 15:09
        +1

        Buy your own house then champ. Then, after that, buy some more and rent them out for $20 a week to some battlers.

      • AuQld on 03/01/2023 - 15:34

        They investment capital and take on substantial risk/stress. There is no real gain from the rent, it all goes on tax, maintenance, mortgage. The amount of rentals that are thrashed is pretty high. They only way a landlord makes actual money is on a capital gain if he's lucky.

        As for the tenant, well they provide nothing to society other than their need for housing.

      • zonra on 03/01/2023 - 17:20

        Is your dr or nurse a service? if your heart surgeon said they wont operate if you dont pay them for every subsequent beat would you complain?

        I don’t know where you’ve been living but your heart surgeon would 100% not operate if you don’t pay them for their time/skill. The reason some patients don’t pay is because medicare and/or health funds cover/subsidise the cost.
        And guess what happen when 100 patients need a particular surgery but only 20 spots are available?
        Surgeons are forced to operate for free? Yeah right.
        Decisions are made and 20 out of 100 will be prioritised while the remaining 80 miss out. These 80 can opt to privately pay for their surgery. The cost will be precisely what the surgeons demand.
        Sounds familiar?

  • jellykingdom on 03/01/2023 - 07:28
    +1

    I have 2 investment properties, and we did put up the rent by a nominal amount, but nothjng crazy (and they were arguably getting cheap deal before)

    But i know people who were getting hit with $200-300/wk rises!

    I wonder whether a maximum percentage rise per annum would be a better method. Im not really in favour of artificially locking in value, but it is totally unreasonable to stick people with a 50% rent rise overnight

    • hawkshead on 03/01/2023 - 14:50

      Did you lower the rent when interest rates went down? also did you do any renovation during the tenancy to improve the property or were the price increases not really tied to any tangible quality of the property? I've lived in rental properties for 20+ years and I've never once had a price rise come with any tangible improvement.

      • brendanm on 03/01/2023 - 15:10
        +1

        Has the quality of the food at the supermarket gone up? Has the quality of your electricity gone up?

      • whitepuma on 03/01/2023 - 15:20

        @hawkshead. i think you need to stop looking at "rent rise" as a direct dollar figure. Instead look at your rent you are paying as a rental yield %. If that rental yield % is increasing, then yeah you may be getting ripped off.

        for example
        If you started renting a property, and that property's value is $500k, and you're paying $500 in rent….(figures i'm just pulling out of my rear).
        But then 8 years pass, you are still renting that place, but that place's property value is now $1,000,000…..if you are paying less than $1000 in rent, then the rental yield you are paying has actually lowered, despite you thinking you are now paying more in rent. This is all without there being any tangible improvement.

        This is a very oversimplified & extreme example, because i'm not factoring in location, mortgage rates, supply demand etc, but it's enough to give you an example of what role the yield plays on your rent amount. I do know & agree that it's a tough pill to swallow, but the sooner you learn it the sooner you will be able to come up with a plan to get yourself out of this situation.

        • AuQld on 03/01/2023 - 15:39

          Yield is measured with risk and also the current cash rate(interest rate)

          If I can have a risk free rate of 4.5% in a term deposit why would it be fair to risk capital in return for a anything other than 6/7%.

          After expenses no rental gives this return other than a commercial property.

          Renting is a really bad investment currently.

          • whitepuma on 03/01/2023 - 15:40

            @AuQld: That's why i said this:

            This is a very oversimplified & extreme example

      • jellykingdom on 03/01/2023 - 15:46

        Actually i put $20k of renovations into the apartment and still managed to end up with less rent per week, during the dip in rental market

  • whitepuma on 03/01/2023 - 08:37

    only willing to cap rent if the bank is willing to cap mortgage repayment (making the capped rent proportionate with the mortgage)

    • hawkshead on 03/01/2023 - 14:46

      Did rents go down when interests rates went down?

      • whitepuma on 03/01/2023 - 15:03

        sometimes yes sometimes no, but interest rate isn't the sole driver of rent prices, its just 1 of many factors.

        What i'm saying is, if renters want to force home owners/property investors to have a capped rent, then home owners/property investors should be able to force the banks to have a capped mortgage payment.

  • Strikezam on 03/01/2023 - 17:09

    case study in America
    https://www.youtube.com/watch?v=Tc8XQGEoEpY

  • mrcee on 04/01/2023 - 00:00
    +1

    Your rent is not going up because your landlords mortgage is going up. It is going up because if you don't pay the increased price there are probably 5 other people lining up for a place that will pay and probably more. It's called supply and demand.
    Not financial advice but you should probably aim to own your own home at some stage as renting long term is a good way to be "left behind".

  • Mugsy on 05/01/2023 - 14:37

    OP, it's not finance you need to understand, it's politics and economics. You live in a society dictated by markets.

  • Fat Horny Ghost on 08/01/2023 - 05:05

    Rents should never be capped.

    This 'rent control tool' does prevents shock and displacement of incumbent renters in the short term, however it simply drives up market rents in the long run, causes urban blight and decay, loses feasibility to maintain a property and increases homelessness due to the higher rents in the overall market.

    There's plenty of evidence to support this as seen in NSW in the past, San Francisco in the 1994, New York multiple times, California multiple times rent control protections, and a good example in Australia is the 'affordable housing stock' of post war / boarding houses seen in Sydney and elsewhere which are heavily restricted in what you can do to ensure there is adequate affordable housing stock.

    You end up with urban blight and decay from dilapidated housing as there's poor investments yields, resulting in money that can go into maintenance and and there's little incentive for owners to improve this as rents are capped.

    Leading on from this any rental caps results in less incentives for developers to build, as there's less investors due to poor yields. Dwelling targets cannot be met. With a growing population and higher demand and less overall stock, the demand for rental properties surges up whilst supply is limited/restricted as there will be less stock for renters demanding to live in that area/city.

    The simple solution, allow more quality developments to happen that provide supply to the market. New developments competes against the shit housing, and landlords must increase the quality of their property to compete against the new quality ones to earn a higher yield. Have the form of rent control that any increases need to be justifiable, not excessive and close to what the market is providing in order to reduce any rental shocks and short term displacement but this will also lead onto higher rents in the long term. Just let the market do it's own thing whilst ensuring there is some intervention to ensure high quality of living spaces and 'some' reduced shock to existing tenants i.e. plenty of notice which is what we have now with 2 months notice.

  • The Hobo on 14/02/2023 - 13:00

    We seem to accept price increases from everyone else without batting an eyelid.

    Cost of borrowing increases for the banks (RBA increases rates) - and the banks pass this on in full.
    Cost of materials increases for home builders, and the home builders pass this on
    Cost of groceries increases for Woolies and Coles, they pass this on

    When a landlords cost go up, they're expected to suck it up and absorb the cost?

    You sign a contract (a lease) - at the end of the lease, they're entitled to increase the rent, and you're entitled to say no and move out.

  • Daniel Plainview on 14/02/2023 - 16:02

    Sorry but terrible poll options and just a poorly thought out idea with zero application to the real world. It's one thing to say, most Australian rental markets are very difficult right now - it's another thing to think 'capping' it on property features or income is helpful, possible or even sane.

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