Rents Increasing in NSW

I applied for a property for a rent via real estate agent. Real Estate agent increased the rental price since they have received so many applications I guess.

Do you know if I can complain to someone about that like Fair Trading?

Due to pandemic it is hard for everyone to pay extra but some real estate agents are becoming super greedy during this time.

Comments

  • +32

    well, some landlord also lost their job…..

    • -7

      Does it mean they would increase the rental prices than standard price.

      • +31

        and what is "standard price"?

    • +11

      Landlord most probably paying 2.5% interest rate instead of 4% so they laughing already

      • -44

        You obviously have absolutely NO IDEA SeVeN11 !

        Since 2012 rents have gone down in many places whilst landlords costs have gone up and up and up.
        Landlords also paying enormous outgoings such as significantly higher land lax (up over 100% in last 5 years) significantly higher strata levies (up 50-80% over last 10 years), significantly higher council rates and same for water rates.
        Then there is significantly higher tradesman's repair costs.
        A hot water system which cost just $800 to replace just a few years ago now costs $1250
        Painting an apartment has gone from $2500 to $5000+
        And everyone knows its costs a minimum of $360 to get any plumbing issues fixed these days except maybe a leaking tap.
        So landlords are under a huge squeeze with rental income down or flat over last 10 years but costs up 50% to 100%

        So like I said dearSeVeN11
        You got absolutely no idea about landlords costs mate…seriously

        • +26

          Mate, I'm pretty sure when you do your taxes this year you'll figure out you've made a lot more net rental than you did in the past. In addition, you need to look at the bigger picture, there's also double-digit capital growth in your property.

            • +46

              @Amayzingone: Sounds like property investing is stressing you out and may not be a good fit for you, best to sell and cash in your profit while the market is hot at the moment.

              I don't know why people who get into property investing and complain about the cost of doing business.

              Are you saying if you were to sell your property now at market value you're down? If so I'm sorry for your loss and that's just the risk of investing in property, if not you should stop complaining and be happy that you're now wealthier than most people and getting ahead in the rat race.

          • +15

            @SeVeN11: Yeah nah the boomer investor is not going to see your point. In his opinion he should be allowed to rent the property for massive rent and pay zero tax and anything else is a travesty.

            I mean, if landlords are being squeezed lately and rental income has been flat maybe leave the market and go do something else with your money?? No? Then shut up and stop complaining. Also no?

            They've ridden the gravy train for so long they can't fathom any other life.

          • +4

            @SeVeN11: nah, rent prices dropped about 20% in covid, if they are up lately they are just really making up part of the gap. But for someone like OP who probably hasn't looked at the prices in a long time, and then seeing a price posted and then get revised up, it's probably a bit of an eye opener.

        • +1

          Are you serious? Sorry, although there are way better investments than property investment out there, but property investment returns has been substantial for most, (in nominal terms of course, there are much higher returning investments out there), so landlords can't cry poor!

          • +1

            @techlead: Most people are negative gearing, and so running deficits, and don't realise their income until they sell up, which is far down the track

            • +1

              @Jackson: Should have done the maths and considered the risks before they took the plunge. Not all investments work out.

              I did the maths in 2013, worked out investing in property will not give me the best return, so I didn't go ahead while everyone around me were all going into property investing. I did the maths and made my own mind up. So glad I didn't follow the herd. I'm doing much better than people who invested in property in 2013.

              • @techlead: I'd be interested to know more about your investments and strategy since then, it's always nice to hear how people made money (ok maybe not always :-))

                I wouldn't suggest their investments are bad, many, many people, esp in Sydney, Melbourne and Canberra, if they sold now, would make a rude profit. It's just that until then, and their strategy might be to not sell until retirement, or maybe never and pass on to the kids, they might still feel the pinch.

            • +4

              @Jackson: I don't think that's true anymore when interest rates are 2-3% and gross rental yields are 4-5%

              Even after fees, most purchase would be positive. People simply confuse principal repayment as a 'cost' when infact it's a 'savings'

              ie. When calculating cost, one should only look at the interest component of the mortgage repayment and not the full mortgage repayment.

              • @SeVeN11: 2-3% are owner oc rates that are principal and interest, if you are an investor you are paying more, and more so if you are interest only (most investors. Also keep in mind after 5 years interest only loans have been flipping to p and I, and that's been catching people out because not everyone is in a position to refinance with the tighter credit market of the last few years. Also rentals in the height of covid last year dropped 20%, and in many markets with new stock properties that are now older are competing with new ones lowering rent again

                • @Jackson: An investment loan is definitely less than 3%:
                  2.34% fixed for 3 years at Bankwest
                  2.09% fixed for 3 years at Ubank (2.14% for 1 year)

                  go find yourself a mortgage broker…
                  if you're deciding to pay variable rates instead of the cheap fixed rates then you may want to work out the numbers agian.

                  1% interest saving on 100k loan is $1k savings, equivalent to getting a 19pw rent increase
                  In Sydney, your loan would likely be 800k so that's 8k savings a year… i.e. equivalent to 154pw rent increase

                  most Banks will have fixed rates between 1-3 years between 2-3%. A mortgage broker might be able to find you a Bank that will give you these good rates and also pay you a few thousand dollars to move your money across.

            • @Jackson: I think people 'think' a lot of investors intentionally negatively gear, but I get the feeling it's only a minor percentage of investors do (i.e. the high risk cap-gains type ones).
              Removing negative gearing is a nice potato to throw in the election to rile young people up, but as a landlord I think it would be way 'fairer' to remove capital gains discount upon selling. I won't ever be in a negative-geared situation at all as I continue to invest.

              There's a cash-flow investor, and a capital-gains investor.
              I'm a low-risk cash-flow investor, and all the properties I acquire from now on will be positively-geared from the start (i.e. will never buy another property in Sydney again).

              Negative gearing is still losing money - I know capital-gains investors may bet this loss against the potential capital gains, but you don't intentionally 'negative gear' for the sake of it.

              Also - I notice people like to compare percentages in returns, but just make sure you're converting said percentages into actual $ amounts:
              I.e. A 10% return on 120K = 12K
              A 5% return on a $500K property (that you use $120K as a deposit for) = $25K - costs - interest. (Interest diminishes over time)

              I also get the feeling managed funds / shares outperform property investment: but not enough to make me consider putting all my eggs in one basket. I'll have a mix of everything when I retire.

              • @wimphrel: From treasure.gov.au:

                Over 1.9 million people earned rental income
                Around 1.3 million of these reported a net rental loss
                Nearly 70 per cent of people with negatively geared property had a taxable income of less than $80,000 per year

                Most people are negative gearing, as to be expected with the majority being in Sydney and Melbourne, where property is generally more expensive up front.

                Without getting into the argument of what is better, it should never be assumed that landlords are in their ivory towers somewhere looking down on the rest of us. Some are sure, but many are just regular people trying to take care of their future.

                Yes, as you point out, someone who has 50k in a managed fund isn't so different than someone who has pulled out a 500k loan and paid 50k deposit, then taken the rent to offset a loss/make a profit. There's pros and cons. When you are working. Egative gearing (which can apply to any type of investment) can lower your tax burden, and if you decide to retire you can sell in a year where you aren't paying as much tax

                • @Jackson: That's a really interesting stat from 2012-2013. I stand corrected.
                  I got a completely wrong impression looking at this article from 2018 based on 2016 data - I seemed to have misread the data, it was just a percentage based of people 'who submitted tax returns' DOH!:

                  https://www.aph.gov.au/About_Parliament/Parliamentary_Depart...

                  Still: I'm of the impression that removing negative gearing was a faulty policy because it affected 1st-time investors more-so than the ones already with their 1st property.

                  You want to tax the people in the Ivory Towers more, not the ones trying to build their small tower.

                  Also that last point was interesting: Here's a related fact check article.
                  https://www.abc.net.au/news/2018-11-16/fact-check-negative-g...

                  Edit: Some more recent stats: https://www.afr.com/policy/tax-and-super/negatively-geared-l... (The percentage of investors with 1 investment is about 70%, so I suppose the ~60% negative gearing rate makes sense now)

                  • +1

                    @wimphrel: For a second I thought you were being sarcastic, but yes when I looked at the link you posted yes you misread the data.

                    I am a bit on the fence about negative gearing. In some ways it could be seen as fair to treat it like any other asset class, but I get that businesses are meant to make things and not just sit there gaining profit without output. I am not sure of the implications but I would have thought investment in property should be increasing supply and should be encouraged but I haven't seen any numbers on that. It is of course as that abc fact check article states skewed towards the rich, but that's obvious because no one invests except to make money after all. I am not saying there aren't mega rich people with large swathes of eye watering real estate portfolios that can take disproportionate advantage of tax cuts, but almost by definition people who have any leftover money are going to be a bit better off and then investing will make them even more better off.

                    And yes of course, like compound interest it allows people to get a foot in the door and eventually benefit from just being in earlier. There's nothing wrong with that, if only first home buyers thought ahead by 5 years and bought a place to invest in while living t home they probably would be happy about it.

                    • +1

                      @Jackson:

                      For a second I thought you were being sarcastic

                      LOL sorry (upon re-reading it I can see how that could have happened) :

                      Someone admitting they made a mistake on the internet - crazy huh?

        • Only yesterday I was watching some ridiculous maintenance work my landlord had to conduct on the property we rent. Basically they do not understand that if they don't "buy nice, they buy twice". The tradie was furious. Investing in property is an absolute PITA, and I pity them. Then I look at my managed funds and marvel at the sight: very satisfactory returns with zero trouble and free tax reporting.

          • @ldq: Yes, as with all investments you can do it poorly or well.
            The rationale behind encouraging property investing is that it provides places for people to rent, so people that cannot or aren't prepared to buy, or for businesses that want to rent premises. I suppose the fear was that if all investors wanted to poor their money into stocks, etc etc, that there would be poor rental supply. (which of course would drive up prices - income - and encourage people to invest in it).

      • +8

        I've got three properties that are renting for less now than they did in 2012 and 2013 (I only bought one of them in 2013). Plus their value has decreased since then as well.
        I don't even want to think about how they've performed once I factor in CPI!

        Bad purchases, but it goes to show that not all landlords make millions of dollars in income off their IPs.

        Plus, people only purchase properties in the first place because they expect rents and/or capital values to increase. They're happy to take the loss at the beginning because they know there's a reward at the end.

        I was going to reply to @amayzingone's post, but they're hidden.
        While his tone is a bit off, I agree with his general point.

        • Yikes, sorry for your loss.

          I did the calculations in 2013 when everyone was FOMOing into property and found that property investment just wouldn't have much returns and I was right. So glad I didn't FOMO into property investing in 2013.

          • +1

            @techlead: Genuinely interested in how you came up with being right if you didn't invest in 2013? Was this a particular market or property type?

            • @aimon: It's easy to work it out. The asset class that they've invested in did more than 300% 2020/21.

              I can imagine that 2013 to 2021 is a 500k% gain give or take a 100k%.

              • @rektrading: In hindsight he made the right decision and that's why he's able to talk about it now, but he could've easily ended up with nothing since it was basically gambling back then. Certainly with the extreme risk it's way too much to stomach for an ordinary investor to hold through the 80% crashes. Perhaps techlead has developed diamond hands but ordinary investors won't be able to sleep at night holding these.

                • @cheng2008: High risk = high rewards.

                  I've linked an asset that has crashed more than 10 times ranging from -30% to -95%. As far as I understand only three people never sold. Their strong conviction has been rewarded.
                  https://files.ozbargain.com.au/upload/393946/90231/screensho...

                  • @rektrading: Right, but like I said in hindsight it's easy to pick winners, but the average investor cannot stomach the volatility and even if they did, their family and friends would've put tremendous pressure on them (just look at reddit for stories of divorce and losing friends after the 2014 crash, 2018 crash, 2020 crash, current crash etc etc.) So even if they were in techlead's position in 2013, they wouldn't have been able to pull the trigger. Who knows, maybe in an alternate universe techlead lost everything and is sleeping on the street. Property would've looked pretty good right about now.

                    • @cheng2008:

                      Who knows, maybe in an alternate universe techlead lost everything and is sleeping on the street. Property would've looked pretty good right about now.

                      Not to mention that they could move into one of the former rental properties =)

        • You most probably just need to HODL for another 10-15 years, as long as the properties are in decent location, it's likely going up.

          Hopefully your cashflow position is actually better even though your rent is down.

          Make sure your interest rate is ~2.5%, if not you're paying too much! Refinancing your loan could make you positive cashflow.

      • You know, interest rates move. They may be low now but they will go back up. And when that does, no one will be saying poor landlord.

    • +2

      and many tenants have used the pandemic as a reason to seek rent reduction or pause.

    • +1

      I wasn’t aware that every investment was risk free. Poor landlord

    • and some landlords havent lost their jobs while interest rates are all time low… neg me to death its the truth

  • +50

    you will probably find that others have offered more to secure the place - not the agent at all.. He maybe just giving others the opportunity to match the offer.

    • Yeah that could be right.

    • +3

      spot on, we did the same when renting (offered more to get the place). I think this is most likely the reason

  • +21

    Its because there is so many applicants that will offer over the advertised rental price due to there being a tight supply of properties.

    Our rental got an extra amount due to the sheer number of applicants, and this was back in January this year. The tenant wanted the rental and she paid extra to guarantee that she got it. There was no greed on our part or the real estates, just market forces at work.

  • +15

    What’s to complain about, supply and demand. You think you wouldn’t do the same.

    • +55

      Im a landlord and i kept mine the same…times are tough for people

      • +2

        Thank you for doing so! :)

      • +19

        My sisters a landlord, keep hers the same too, mortgage only gets cheaper with time so what's the point.

        • +1

          REA costs keep rising.

          • @serpserpserp: What's REA?

          • @serpserpserp: then (profanity) REA!

          • +1

            @serpserpserp: Oh right, yeah the REA costs that keep increasing because rents increase…but rental increases because REA increases…but electricity and stuff as well right because wages need to increase to keep up with the rental increases that rise due to REA increases….

        • +2

          Respect her :)

      • +1

        Its not really a fair comparison because we don't know your financials and profit on your property compared to anyone elses.

        • Im just a normal person

          • +3

            @WreckTangle: Oh ok.. What does a normal person investment property cost? What does a normal person set the rent to?

            I wasn't aware things were all the same if you were a normal person.

            • -7

              @samfisher5986: Most property investors are mum and dad investors just trying to get ahead.
              Just like most other people
              Others might invest in shares
              They are Not big time property tyrants that buy and build entire apartment blocks

              • +1

                @Amayzingone:

                Most property investors are "mum and dad" investors

                Ah, I thought they were all singles.

              • +3

                @Amayzingone: Well, a couple of things here.

                1. People just trying to "get ahead" are still far better of than people actually just trying to "be able to live". Even if you took out a second loan to purchase the investment property, you still need a certain amount of equity in the original property to leverage that.
                2. Regardless of whether their costs are increasing, investors, for the most part, still have more assets and networth, (not to mention equity in property) than the tenants who rent from them.
                3. If they were not "big time tyrants", more so if they came from less, they would understand the difficulty of being under financial stress, just trying to find a place to live, WITHOUT an extra property to call an investment.
                4. Investment is, and always has been, a risk. Are they only willing to take the gains without taking the losses? - and yes, I work in the industry. It surprises me sometimes why people are so willing to risk the family home to gamble on the chance of great rental returns.
                • @jatyap: You shouldn't assume, there are plenty of people who save up for an apartment and lose money, then lose money again when things go wrong, body corporate fees etc.

                  Anyone with multiple properties is likely "ahead" but otherwise its very silly to assume.

                  • +1

                    @samfisher5986: He's not assuming anything, he's saying that prior to those buying second or third houses, they're already pretty well off if they can. There's really no need to compete with those looking to buy a home for their family for stability. Go invest in shares, startups or companies that'll advance society.

                    He said for the most part and even you say they're likely ahead. He's looking at the bigger picture, not individual cases.

                    • @bkhm: So, how do you know how many houses a person owns? or are you just guessing?

                      • +1

                        @samfisher5986: I don't…it's specifically for those who own houses already, not assuming everyone…

                    • +2

                      @bkhm:

                      There's really no need to compete with those looking to buy a home for their family for stability.

                      I don't quite get this part of his argument. If the investors get rid of all their investment properties, then there's no properties to rent out. Because of that renters must all start buying. Wouldn't the demand for houses/apartments be exactly the same as before? You've just turned renters into buyers but there's still just as much competition as before. Prices are still going to be through the roof.
                      Plus the renters end up with all these high bills. Now that they're the owners, they're the ones getting hit with risk. What if the risk turns against them and they can't make payments? They don't even have a fallback option to rent as no one has spare properties any more.

                  • +1

                    @samfisher5986: Not assuming, but it is a bit of a generalization (hence the "for the most part") - not directed at any one person. Like I said, I work in the industry.

                    Moreover, worst case scenario, the investor's "I might be forced to liquidate and lose my investment property" is a scenario a lot of renters (especially those who rent at the lower end of the spectrum of prices) can only start to dream about.

                • @jatyap: 10000% agree, especially with point 3.

      • -1

        Lucky you didn't have to take a big hot like many other landlords

      • +3

        I never increase the rent. I just hope they dont move out. To me it is headache to look for new tenants. A few months ago i had to reduce from 350 per week to 310 to get a new tenant. Market was tough at that time…

    • +7

      We've got great tenants at the moment (they have been looking after the yard and house well and haven't missed a payment). So we haven't changed our rental price since pre-pandemic levels. They just signed up for another year and we didn't increase it.

      It's better to have great tenants that are no fuss than an extra $500 a year. Bad tenants and changing tenants can easily cost way more than that.

      • +4

        That's all true. But OP is a new potential tenant - the LL has no idea if he/she will be a great tenant or not. So best charge market rent …

      • +1

        So agree with that we use a agent that we want to ditch,they all seem to think if we charge max rent and the rent keeps coming in we have done our job. Well its a lot more than that at the end of the day its our property and we want it looked after,bugger the few dollars.

  • -1

    I would never do that lol.

  • +12

    Have seen prospective tenants bumping up offers for quite some time now, move along, nothing to see it's just market forces at play here.

    • -1

      yeah I am putting the same price on the application as per advertise but few days they increase the prices. So how can i match that price …. :(

      • +7

        By adding more than they are asking, not hard.

    • Not happening in the desirable Eastern Suburbs of Sydney nor in many other Sydney suburbs.
      Must be looking in the wrong places

      • +1

        I don't think you're looking at the wrong places but more like the wrong segment of the market. Try looking at the low to mid-market where there's more rental demand than stuff that's >$1500/week.

      • That’s completely untrue. It is absolutely standard to offer more than the asking price in the eastern suburbs. I have had to do this myself on more than one occasion and most of my friends who rent have had to do the same. If there are numerous applicants, the agent will make it very clear that best price wins and it’s best to up your offer.

  • +6

    Just find something else

    • yeah no choice left

      • +3

        Are you looking in Sydney? Which suburb?

  • Fiat is losing its value against hard assets like real estate.

    It's reasonable for investors to do what they can to keep their gains on par or better than other assets.

    • +1

      Yep Just "normal" people

      Or maybe not
      The new norm is to be in huge debt.
      Borrow more and more to buy that new TV or pay for that holiday

    • +1

      Most people don't understand this concept.

      Over the last 10 or years, the group of people who has been going backwards are those who work and save diligently and putting it into the bank. Fiat is not worth holding, it is not worth the paper it is printed on. The intrinsic value of a $20 note is probably a few cents.

      • intrinsic value of a $20 note is probably a few cents.

        could be used as toilet paper =)

        • haha, could be, but its smooth though. If I'm out of toilet paper, I'd use the pages of an old book.

  • +2

    some tenants have also low balling…..

    • +2

      You seem to want it both ways.

      Customers can offer what they think is a fair price and retailers/businesses people can accept or reject.

      The biggest problem I have is that the majority continue to subsidise the property businesses (yes, that’s anyone that owns a property for the purpose of rental) via personal tax cuts against an unrelated (to the property business) income stream.

      • +2

        Negative gearing should be abolished, it makes no sense. If you have a loss, then it should be used to offset future gains in that same income stream, ie property investment, it cannot be used as a credit against other income stream like right now, its a total farce.

        Even with that very generous perk, there are much better investments than property investment, its not worth the trouble.

        • That’s the issue. It’s the only business that is allowed to use deductions against other income to subsidise losses. I use the word subsidise because it is you and I that finance it instead of that money going to services that actually benefit the community.

    • +4

      if no contract is agreed to why wouldnt it be legal?

      • because it would set a dangerous precedent, like rent gazumping or rent auctions

Login or Join to leave a comment