The coronavirus crisis has severely affected the housing rental system in Australia. But how tenants respond to the "new standard" can determine whether they can overcome challenges or not.
The economic disruption created by the COVID-19 pandemic has resulted in unprecedented financial hardship for Australian workers. With many layoffs or reduced work hours, people are very concerned about how to meet their housing expenses.
The rental property website Rent.com.au recently surveyed 1,600 Australian tenants on how the global epidemic has affected them financially and what it meant for their future plans. The results, reflected in the infographic below, were revealing.
How has the COVID-19 pandemic affected the ability of tenants to pay their rent?
The government foreclosure prompted many businesses to close, almost immediately resulting in job losses or reduced hours for many workers. In turn, this seriously affected the ability of tenants to pay their rent.
The survey found that almost 60% of those interviewed were earning less due to the pandemic while a third admitted that they had completely lost their job. More than a fifth (22%) said their ability to pay rent was negatively affected.
Greg Bader, President and CEO of Rent.com.au, said that although the closings were "devastating to many businesses", there were specific industries – such as the hotel industry, tourism and retail – which were hit the hardest than most
"These are also the kinds of industries that generally over-index with younger staff, the largest cohort in the rental community," said Bader.
He added that although the federal and state governments had taken measures to support tenants during the crisis, there was still a level of confusion among tenants regarding plans for accommodation. ;help.
This led more than half (53%) of respondents to say that they would like to see more government assistance – with only 13% believing that the support the government had given was sufficient.
“Short-term protections, such as a moratorium on evictions or a deferral of rent, bring some comfort, but it is to be feared that this will only shake up the can. We hope to see industry and government respond in innovative ways to support tenants and the industry as a whole, "said Bader.
"We have to understand that the tenants, who represent 30% of us, will continue to face the financial impact for months or years to come."
How are the owners managing the COVID-19 crisis?
But while tenants face the difficult task of supporting payments with reduced income, landlords are also under financial pressure to have their loan repayments covered. This position can lead to distrust between tenants and owners.
According to a survey, two-thirds of tenants do not feel confident to ask for help from their property owners or managers. Only 32% said their owners were in favor of the crisis.
Bader stressed the importance of communication in these uncertain times and urged homeowners and landlords to check on their tenants.
"Open and honest communication is the key and can only be of benefit to all parties as we prepare for the coming months," he said.
However, the survey found that not all tenants asked for financial assistance, as only 35% of the respondents asked the landlords for a reduction or deferral of payment. Unfortunately, more than half or 52% of those who did so were rejected.
"Obviously, each case is different, and the tenant will generally be required to demonstrate any impact on their income / accessibility," said Bader.
“Property managers and owners are also affected by the crisis and we are all exploring new horizons. Again, open communication is important, as both parties need to show empathy and understanding of each other's situation. »
What are the plans of the tenants after the pandemic?
The pandemic also undermined the plans of many tenants to move to new properties.
According to the survey, half of those surveyed planned to move within the next six months. However, 47% of this group have suspended implementation plans indefinitely, while 30% said their plans will have to be delayed due to the pandemic.
Bader said it was not surprising given the economic uncertainty of that time.
"With record levels of rental properties available at this time and the possibility of downward pressure on rents, property owners and managers are even more encouraged to negotiate with their tenants because finding them a new one will be a little more difficult, ”he says.
However, Bader said that his business had seen "some positive sentiment back in the market" in the past few weeks. He said activity on their platform – like traffic, tenant resumes and property inquiries – had increased compared to a month ago.
Some tenants have started to see the light at the end of the tunnel, with around 30% of those interviewed saying they are optimistic about life after the COVID-19 pandemic, in particular with restrictions slowly starting to loosen.
"This is a good sign for us as a community, and we hope to see this growth in the coming months as the economy reopens and the tenants have a little more security." In the meantime, we encourage tenants and property managers to stay connected, ”said Bader.
