Hi,
So my landlord has increased rent by $170 per week or 25% with 2 months notice. New rent on par with market rate then. I am not on a current lease. Is that fair or normal? Also is it true the landlord can only evict with 90 days notice? But I can leave with 21 days notice.
This is Sydney.
Is this rent increase justified or normal?
Ta.
Rent increases were under inflation for the most part since 2013 excluding the last 2 years. If you had a fixed 2.5% annual increase since 2013 to this year, you would maybe complain less but you would most likely have paid more over the 10 years than you do now but would have less to complain about.
If you had a fixed 2.5% annual increase 9 times (cumulative 22.5%) over 10 years, you would have paid around 7% more over the life time of your tenancy than if you had a fixed rent for 8 years followed by an annual increase of 15% two times (cumulative 30%). And that is not yet accounting for inflation where 1 dollar 5-10 years ago is worth more than 2-3 years ago.
Guess which one people are more outraged about. Its so easy to get Australians emotional about the wrong kinds of stuff by confusing them with numbers.
thats not how cumulative % increases work.
nine 2.5% increases is 24.88%
two 15% increases is 32.25%
While this is true, the landlord is able to pass the cost not only to the renter, they will be able also offset part of the increase through negative gearing.
Not saying landlords shouldn't do eveyrthing available to their to make life easier, but at large, it's in the gov's best interest to look after them before the renter.
That's not how negative gearing works.
And exactly how is it the renters fault the owner made a poor investment choice? They could have invested in gold, silver, bonds, stock, heck could have let it grow in a savings account. But they made a choice to invest in property, if they can't afford the interest rate rises maybe they should have considered their risk when investing.
Just increased 170pw and its still at market value. Sounds like a great investment choice
That really depends.
If the property is fully paid off, it'll go into the landlords pocket. This is good.
If the property is still mortgaged, it will go to the bank. This is bad.
Understand?
How is it the owners fault so many people want to rent his property that he can increase it, and if not you, then someone will gladly pay the price?
I was a renter for years, that's just the way it is. Everytime I see those tv reports where they interview people it's always around the city, near beaches or the inner west they're complaining about.
Move out to the west or south west if it's too expensive.
My blocks 212 townhouse in Lidcombe went to rent at $500 with 5-6 viewing parties. No young people.
13mins walk to a major station, shops and 45 to the cbd.
But it's not cool like marrickville or chippendale, so they'd rather pay 600+ for a room and then complain.
While I agree with your point that the TV news hypes up the most pointless examples, when the beach dwellers go 45min out of the city, where do the people that used to live there go?
(They go into share housing, or sub par accommodation).
Nobody is supposed to pay somebody else's mortgage dude. People are supposed to pay for shelter and it doesn't have to be equal with whatever amount of mortgage the landlord pays.
Jesus, what a sick apporach.
Not sure why so many people negged your post. Landlords are effectively business owners. No one expects other business's to run at a loss. When property prices are stagnant or contracting landlors are losing money. On the flip side I feel really sorry for tenants they are also victims of the RBA and poor government planning for adequate social housing.
oh I didn't realise property was supposed to be a risk-free investment with pure upside?
Theres always a risk to any business but when a business expenses increases its normal to pass on the extra cost to the consumer. All businesses need to be profitable or they cease to exist. Government housing doesn't need to make profits and the issue is they haven't built enough for the vulnerable. We need landlords to be profitable in past they have been able to rent properties for less than the running costs eg interest, rates, insurance, agent fees and wear on the property because increases in property value were covering those expenses and creating profit. Having landlords absent from the market in the past was a massive social issue as not everyone can afford to buy so the government introduced negative gearing to solve the issue rather than building social housing which costs a lot more. Don't hate the landlords it's the many decades of poor government decision making that have produced this problem
New rent on par with market rate then.
So what is your basis for complaint?
Being brokeass and cost of inflation
Sounds like a move to a more affordable property/location is the right play for you.
Are either of these the landlord's fault?
With current public opinion, everything is the landlords fault.
@Mike88: Actually current (manipulated) public opinion is the opposite:
It is ALL the "renters" fault. Always.
@LFO: Genuinely it is the Labor government's fault (record immigration), and the banking systems fault, which is also ultimately the government's fault. There are other ways to address inflation, and the banking systems massively inflated rates are unnecessary, and merely to drive many billions in profits, and return on what includes very little of their own investment. Fractional reserve banking DOES NOT loan out deposited assets for new loans, it 'creates' the money to loan, meaning there are very few costs to it at all.
@LVlahov: And just an additional word on that as I know others will try to debate it.. look at the banks record profits, and play with the maths on their charged interest rate, and play with it by reducing it until their profit (as an individual bank), was down to $1 billion (still a massive profit)… yeah.. that is the BEGINNING point of where an alternative lies.
@LVlahov: Well, realistically, it is the Australian society as a whole the ones at fault (we included, probably).
Proper, decent, housing commission dwellings is the solution.
But the Australian society, voters, don't like it.
Think of the Sirius building in Sydney.
Built by G. Whitlam as an icon of affordable housing.
Sold to foreigners by an Australian elected government.
And most Australians were so happy about it … how dare renters to have Harbor views … back to the sewerage you dirty bludgers …
We did it, no one else.
We did it. We do it. We will do it.
It is us.
Pathetic.
@LFO: I wouldn’t trust the government with any sort of large social projects, from the nbn, building roads or creating housing commission, it’s just money pissed away in the wind. All they do is outsource it to some consultant or project management firm to waste money and time creating sub standard work that private companies could do it for half the resource and double the quality. Which essentially is what private landlords are doing. To incentivise them to take on this investment, we give them tax breaks, and also in return we can blame them for everything.
"So my landlord has increased rent by $170 per week or 25% with 2 months notice. New rent on par with market rate then.
Is this rent increase justified or normal?"
It's a massive increase that's for sure, but as a Landlord myself with an investment loan, even if I put up the rent 50%, it wouldn't cover the increased interest that I've copped.
Given it's on par with market rent, I'd say that's tough, but within reason.
If the property is in good condition, then I guess you'll have to cop the increase, you're not going to do yourself any favours by finding another place.
Who says I can't afford to pay the loan?
If I could pay $11 brokerage to sell property like shares, and then repurchase the same shares with $11 brokerage, I would. But transaction costs for property is way too much to be buying and selling on a whim.
Property is a long term investment, eventually the interest component of my repayments will get smaller and smaller and rent will increase. If you can't afford an investment property at 7% interest, yes, you should consider selling.
But so far, I haven't increased the rent. I can afford it, my tenants can't. May look at increasing it next year.
Didn't mean it as a personal attack on you. I don't measure people's worth by how much debt they can carry anyway.
Well done JimB. I rent but also have an IP and only increased the rent year on year by $15. Long term tennants who look after the property so is a no brainer for me
@Slinky0111: yeah, better to have good tenants at slightly lower than market rent than to take the risks with new tenants every couple of years.
Learn how economy works and also why its a bad time to sell home. Btw i have a house to sell. Would you buy it?
No I don't want it. I think the odds of the bubble bursting is too high, either the ALP or Greens could in the next few decades incentivise the building of high density residential structures to provide a fix for housing affordability in all the major cities. I prefer to rent in affordable areas and invest my savings compared to paying off a million dollar mortgage. I have no problem living in a high density tower if that's what the future will offer. I'll pay for storage for all my stiff if I need to live in a smaller tower apartment.
@AustriaBargain: Good idea. In Victoria, being a landlord is comes with a tag of evil for some reason and hence all the policies changes favor tenants and against landlords. Landlords have no incentive to stay in this market and then Melbourne will become another san francisco in few years. I am already seeing lot of homeless all around the city in increasing numbers. Graffiti everywhere on roads. So its fast becoming san francisco cesspit
@Notacommie: I don't think the average property investor is involved enough in their own properties to be called landlords. Their REAs are more like professional landlords. The profession of "landlord" is not quite the same as being a "property investor".
@AustriaBargain: Yes this is true. Rent increases, decreases are all suggested by the REA and realistically is purely influenced by going market rates, not interest, nor mortgage situation. That is circumstantial
Slight difference here: Your shortfall on the repayments is a tax break, essentially bailed out by the taxpayer. The OP gets no such support.
My landlord also increased from 550 pw to 700 pw in sydney CBD.
if you don't think is fair, move out, live somewhere else or a tent.
if you haven't watched the news lately you prob should
OP is asking "Is this rent increase justified or normal?"
Answers would be: YES or NO.
I think OP answered their own question:
New rent on par with market rate then.
Answer is: Yes
it doesnt need to be justified. a person has the right to request what they want in terms of rent, pay, selling an item. Market dictates the price, and unfortunately due to our insane useless governments everything is inflating quicker than pam andersoons boobs.
25% only you should feel lucky.. just pay and keep hunting bargain with us here
So my landlord has increased rent by $170 per week or 25% with 2 months notice. New rent on par with market rate then.
I think you've answered yourself within the space of two sentences.
You can apply to tribunal for excessive increase, as its a big increase in one hit. I spend my spare time sorting out my stuff so its more mover friendly and I am not trapped in a black hole
If the increase is in line with market rates, it’s unlikely the tribunal will determine it’s excessive.
There’s many factors that are taken into account here. The number of interest rate rises and the fact that landlords can only increase rent once a year means the landlord doesn’t have much other option but to issue large increases to keep rental prices in line with market rates.
It's a supply and demand issue that our government had created and manipulating. Most renters have the same problem. If you can find a cheaper place then do so. Better yet buy your own property and rent it out with a 25% increase.
Seriously if OP can't afford $170 more . OP is mostly likely at the bottom of the pile of the huge queues for latest releases.
$8,840 a year is a lot of money. So OP is currently paying $35,360 a year in rent with the new total $44,200 a year.
And the landlord has to pay that increase and more to the bank, REA, repairs, land tax and more. But if they can’t afford to absorb the increase expense they shouldn’t be in the rental business right?
What are you on about
I'm not sure the government manipulated the supply issue all that much. Ignoring the dodgy practices around land banking we're seeing building companies go under and people going broke due to material costs skyrocketing, there's not much they can do to fix that. It's still cheaper to buy an existing house than build a new one with land and building costs so high.
Housing starts were down in 2018-19, then covid hit and pushed down the housing new starts, then it finally started getting going and it was slammed by the cost of imports and lack of labour. We simply haven't had the ability to build like we should the past 5 years, a bit of a perfect storm on the supply side.
Housing starts were down in 2018-19, then covid hit and pushed down the housing new starts
Wonder what housing starts are like now. They're a leading indicator for recessions.
https://www.abs.gov.au/statistics/industry/building-and-cons…
Will be interesting to see what March qtr is like, houses have held up sort of ok but non-house residential properties (i.e. apartments) has tanked.
Sounds like a bargain.
Peter Dutton sent me email this morning:
10 million Australians face a tax hike this year and around 175,000 are projected to lose their jobs.
This Government is spending an additional $185 billion dollars, but millions of middle-income Australians won’t receive a cent.
Amidst a housing and rental crisis, migration will increase by 1.5 million people over five years. (More than the population of Adelaide).
Your power bills are going up by more than $500 dollars.
The Government’s policies will cause inflation to stay higher for longer, putting pressure on interest rates.
I guess he's right, I mean a politician wouldn't lie or make stuff up would they?
(Though you have to wonder, if 10 million Aussies are going to get scammed even more tax that would be just about the whole workforce wouldn't it?)
I don't understand how inflation can stay higher for longer if people are going to be shafted so badly with 175,000 jobs lost, higher power bills, extra tax, higher rents, and higher interest rates. There's literally no proper causal analysis undertaken in this doom and gloom publication. Not that this is surprising.
Stagflation.
All of that is technically correct (the best kind of correct). I know you've posted with a heavy grain of sarcasm but I always find it weird out both parties talk crap when they in opposition, with clearly ideas that contradict each other, or not proposing solutions and just problems.
The implication always that things would be done differently. All implication, no plan of action. Not fair to just blame the liberals on that style of politics but its bloody Unaustralian and I wish more people would call their own sides of politics out on it and have less of a US style drama that insults democracy and puts politics before policy and action.
Immigration is high - We don't want to suggest another value that we think would be more reasonable, we could be held to account for it!
Your power bill is going up. We're going imply this is the government's fault and ignore that they were going up when we were in. We're not going to provide a plan as to how we would help keep them lower.
They are taxing you more and people are going to lose their jobs - that's definitely deflationary but they are still going to make inflation go up as the economy hits the road bump and slows down.
Not sure how accurate the 175k job losses are, but that's the wonder of projections. Sounds like one of the recession scenarios and be surprised if the inflationary pressures hold on end of 2023 if we get those losses (approx 1.3%?)
Arguably the tax take hike is on the liberals anyway- they brought forward deductions last year and now everyone has to wait a year until stage 3 tax cuts. At that time it was probably the right decision as well.
/rant.
LOL What stage 3 tax cuts ? Both major parties will have some sense and come to an agreement to scape it . Then finally they have done some sound economic policy .
Both major parties will have some sense and come to an agreement
I'm guessing this is sarcasm? If not…
If those tax cuts don't get passed all it would do is help bring down inflation and lower the debt. Both of which would be fantastic for Labor going into the next election, but if the Liberals don't support it they can at least campaign on Labor being a tax and spend government. Their approval isn't needed anyway, Labor and the Greens could pass it together, so there's not actual need for them to support it no matter how much sense it makes.
Labor, on the other hand, will actually need to change tax rates at some point in the next few years (thanks to bracket creep) and likely by 2024 the economy will be near shitting itself and will need every economic pump turned on so they'd be passing tax cuts anyway.
@Ghost47: Really wish ABC would be a bit more independent in its reporting. How much income tax is effectively never levied at personal rates simply because of the difference between personal and corporate income taxes? Isn’t it particularly unfair on middle class Australians to get whacked 47% when the big end of town only ever pays up to 30%? Finally, forgone revenue is not necessarily a “cost” in tax modelling. People change behaviours and that has other impacts - something the ABC conveniently ignores.
@kipps: The big end of town doesn’t always pay tax. The rich don’t pay tax through policies like negative gearing and setting up their own corporations. The middle class can avoid tax using non-concessional super contributions.
I thought that reporting wasn’t that biased as it was mainly showing how much the tax cuts would be worth using the numbers and graphics. I don’t think you can deny that leaving tax brackets as they are could be very beneficial for the government’s coffers.
@Ghost47: Imagine the money that could be spent on infrastructure if social security payments was ZERO. I bet no one would graph that! The information was pitched to lead the reader to a particular POV. Thats why its bias.
@kipps: "middle class Australians to get whacked 47%"
You mean the individuals declaring in excess of 180k pa? That middle class?
@kipps: The average tax rate of all tax payers is around 32%. It's higher than the corporate tax rate.
It's well known by both sides of politics that the middle class pay the majority of taxes in Australia, and make up a greater proportion than in most comparable countries. (Including in freedom land where they constantly whinge about taxes being high)
@kipps: Dont know why you got neg. Totally agree that the highest tax bracket should never have been on individual PAYG. Stage 3 simply brings some fairness to people who work hard to make a good living.
Immigration isn't as unpopular as the online complainers hope. around four fifths of first preference votes went to ALP, Coalition and Greens as well as some pro immigration alternatives and independents. The highest number of first preference votes to parties you don't see mentioned in the media (which cuts off after UAP/Nationals/Pauline Hanson) went to the liberal democrats which are pro loosening up immigrantion. The sustainable Australia party is much further down that last by first preference votes.
I'm just glad we can say immigration has negatives now without being called racist bigots.
Unfortunately the parties that have good social policy that benefits most Australians are also pro immigration, and the anti immigration parties are just hacks with no intention of actually leading.
I've never met someone who was vocally pro immigration, but many many people who are either wary or concerned about it. Just because one nation isn't leading in the polls doesn't mean their views are entirely unpopular
@greatlamp: The racist bigot accusation is just a strawman defence. A vast majority of parties in the past that were anti-immigration and the mascots of the negatives of inflation were racist bigots. People who espoused the negatives of immigration without being racist bigots were not being called racist bigots.
They're not just "isn't leading in the polls". One nation, Sustainable Australia, Animal Justice party and the other anti-immigration parties (whether hacks or not) together have less than 10% of first preference votes. Their views are definitely unpopular compared to the rest of the other party's platforms by the definition of the word. I would consider also the greens unpopular by democratic mandate because they failed to get it.
We'll see about the next election but as of last election, the immigration status quo was definitely popular and anti-immigration stance was not.
@cadwalader: Blah blah blah immigration is bad. Blah blah im not racist. Blah blah. Mate unless you are 100% first nation, you are here purely because of immigration even if you were born here (the sperm and egg that made you came from somewhere). Immigration is not the sole cause of rents going up and without it doesnt solve the problem either. Do some research.
Immigration is not the sole cause of rents going up and without it doesnt solve the problem either
I'm aware of that. We had similar immigration levels pre-covid and rents and unit prices didn't go up despite interest rates going down.
Peter has more rental properties than than he knows what to do with.
And more migration means more money for Peter. So Peter gives zero nay negative farks about any of those dot points.
But an oscar award for this cant pretending he cares about any of this shiz.
Sauce?
https://icacpls.github.io/interests/peter-dutton.html
Kingston, ACT 1
Residential investment
12/10/2016Moreton Island, QLD
Residential investment
12/10/2016Palm Beach, QLD
Residential investment
12/10/2016Spring Hill, QLD
Residential investment
12/10/2016Camp Mountain, QLD
Principal place of residence
12/10/2016Townsville, QLD
RHT Investment (QLD) P/L as trustee for RHT Family Trust purchased an investment property in Townsville
So my landlord has increased rent by $170 per week or 25% with 2 months notice. New rent on par with market rate then. I am not on a current lease. Is that fair or normal?
Things to consider: 'Increase frequency' depends on the term length. If you're continuing to stay on the periodic agreement then this is once a year, with 60 days notice. This increase may cover previous year being lower, plus the increase over the year and maybe hedging additional costs for the landlord over the next 12 months. If that brings rent up to the market rate then I'd consider that 'Fair'. If you're confident your property is similar quality to the other properties at that price. If its demonstrably excessive (doesn't seem to be the case here) you can take them to tribunal and get the amount lowered.
If its above your budget but you'd like to stay you can reach out and counter offer. They have no obligation to accept but countering with a $680 —> 830 instead of $680 —> $850 saying you understand the need to increase, but the new rent isnt sustainable or could cause some stress for you and would they accept the lower offer.
$20 a week less may be a win-win. If they could kick you out and get $900/w tomorrow then its not really fair on the landlord as they already are trying to meet you half way. If they are going to rent it out for $800 tomorrow then counter offer/tribunal may be the option.
Also is it true the landlord can only evict with 90 days notice? But I can leave with 21 days notice.
Yes those are the correct timings for terminating a periodic agreement in NSW but this doesn't mean you shouldn't pay the rent and wait to get kicked out. As far as I know, you still owe the money from the increase (that's why you get 60 days notice, so you have time to move out if you want to), it would result in you being taken to Tribunal and mark being put against you as a renter. Also - if tenant then doesn't pay rent for 14 days, the landlord can give a termination notice for the non-payment of rent.
Eviction and notice for eviction are slightly different things, where after a time line for eviction after the notice. Don't let it get to that stage. Have the conversation with your landlord about what could be a win-win. If you can't cover the costs and you need more time to find a place ask if you could get another 30 days to help with finding a place at the old rate, and in return you'll be helpful with the inspections for you current place etc.
New rent on par with market rate then.
Looks like you've had it lucky the whole time before this increase… so there should be no complaints now.
mine went up by $100 pw
I would take it to the tribunal saying its too big an increase in one hit. And work on Plan B, never rely on anyone,have a Plan B
New rent on par with market rate then.
Is this rent increase justified or normal?
If the new rent is on par with the market doesn't that answer your question of justified?
Why do tenants always ask this??
If you feel the rent is too high, LEAVE and find something cheaper.
The landlord can then suffer if he doesn't find anyone.
New rent on par with market rate then
You were paying below market? Did you bank all the savings?
Start looking. If you find something below market jump on it!
I believe it's an expectation that tenant will keep things neat and tidy? I could be wrong.
A good tenant is one who not only keeps the place clean & tidy, but also pays market rent on time and honours the terms set out in the rental agreement.
People always throw out this line that good tenants are hard to come by as a way to justify their whinging and complaining.
The reality is, the next tenant could be worse, or they could be better. Most tenants do the right thing.
I think it goes both ways.
I've got tenants on below market because started off at friend of family. They keep things nice and tidy. They've been there for 2 years (city apartment)
Got other tenants I know who is below market because I pretty much back out agent commission and they keep the place tidy. I gradually increase the rent last year it was 3% and not even up to 2019 levels. Will go up another 3% next year until it gets to market less agent commissions. They've been there for like 5 years.
Got rental agencies that will bump it up to market and only get tenants for 6 months and they move one. It is actually a dumb move because a week without rent is actually that little bit of difference. I'd rather be out 3% than have 2 weeks vacancy that is 4% and advertising.
Echoing what a few others have said…if you've been paying below market until now it sounds like you've had it good for a while. Hope you were able to save up a bit during that time.
New rent on par with market rate then.
Is that fair
Yes
wait till the 715000 jimmy grants come. no job and no house
This is Sydney.
Is this rent increase justified or normal?
I just replaced my dodgy tenant last week and increased my rent from $420 to $540. I'm also in Sydney.
So yes, to me, it's normal since I'm matching up with the other rental rates in my local area nowadays.
I see the tenants have come out to downvote now.
Pointless as my new tenants have paid their deposit and will be moving in on Tuesday :)
Your landlord is simply realising that interest rates somehow weren't going to just keep going down and staying down. It's likely they don't understand anything about how the economy and inflation works. Take some pity on them and pay the increased rent, they need it more than you do. All landlords are such battlers and deserve all our pity.
my thoughts and prayers are with landlords in these troubling times!
lol
Tell him he's dreaming and offer $100 per week.
So why would a landlord agree to accept below market rates, when they could just tell you to move out and find someone who is willing to pay said market rates?
Exactly right. People will pay it because demand is high and stock is low. You will find you will most likely have to find another place unless you give in.
My sister moved out because her rent was going up $150 a week in Melbourne and the agent had someone for her apartment pretty quickly.
There's nothing worse than insensitive tax, I suffer this burden every year in July.