The Real Estate Institute of New South Wales has criticized the State Government's decision to extend the rental moratorium for six months, calling the decision an "insult" to landlords .
New South Wales followed Victoria, Western Australia and Queensland in expanding the supposed rent support program to tenants and landlords. However, only Queensland intends to end the moratorium on evictions by the end of the month.
Tim McKibbin, CEO of the New South Wales Real Estate Institute, said 80% of homeowners in the state are mom and dad investors and self-funded retirees who will be significantly affected by decision. McKibbin believes the move, which coincides with the end of repayment holidays for most borrowers, will cause a "perfect storm" for many small investors.
"How will these mom-and-dad investors, many of whom have lost their jobs, cope? Banks have already made it clear that the harsh reality for many homeowners is that they are going to have to sell their business. property to get out of debt. The nest egg that people have worked so hard to achieve and for which they have sacrificed so much will be lost, "he said.
McKibbin said the state government claims the extension supported both tenants and landlords is "insulting."
“To date, the government has paid the Tenants Union $ 13.5 million to help tenants. Not a penny was provided to help the owners. It undermines the absolutely essential role owners play in society, ”he said.
The impact of the ruling on landlords could ultimately affect tenants in the future, McKibbin said.
"In the end, renters will suffer too. Fewer properties available for rental in these incredibly tough economic times are pushing more people onto the streets," he said.
A recent statement from the Real Estate Institute of Western Australia (REIWA) shared similar sentiments about extending the ban on rent increases and the moratorium on evictions.
REIWA stated that these rental protections have already resulted in low vacancy rates in Perth. If the low vacancy environment continues, tenants may face a sudden increase in rental costs.
"Low vacancy rates are normally a trigger for investors to enter the rental market, which increases inventory levels, but due to the residential rental law, investors seem reluctant to buy, ”REIWA said. "If the current ban on increasing rents is lifted in March 2021, it will be reasonable to assume that landlords will have to increase rents significantly to match the market."
Harden Groves, vice-president of the Real Estate Institute of Australia, called on the Western Australian government’s decision, saying it has nothing to do with protecting tenants.
“To date, the conciliation service provided by the Department of Consumer Protection, set up to assist tenants affected by COVID-19, has received approximately 800 requests since the entry into force of the emergency laws six months ago. The lack of recourse to conciliation reveals that there is little need to extend the emergency period, ”he said in a report published in Real Estate Conversation.
Groves said the "lazy and reckless" move could create rental shock as the offer remains tight.
“It is entirely reasonable to continue with emergency support measures for tenants affected by COVID-19. It's just confusing that the extension was applied to all rentals, ”he said.
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