G'day bargainers,
just got a letter from the RA advising my rent will increase from $1430 fortnight to $2500 a fortnight. That's almost 75%
Now, I understand I had a good rate due to Covid, but 75% increase? I was expecting 40-50% increase tops. Is this legal?
Any advise on how to negotiate with the RA to bring the rent down? I'm almost having a panic attack here with the huge increase.
Thank you.
1/10th đ
fb marketplace style đ«
Google which NSW department that looks after rental disputes and check what they have on their web site would be the first step.
Look on the bright side, at least it hasnât tripled.
The landlord is likely facing higher repayments due to interest rate increases. They are increasing rent in line with that. They are probably getting reamed up the butt by interest rates.
lol interest rates did not go up 75%
Well⊠the cash rate went from 0.1% to 2.85%.
And in Feb/Mar a good variable rate probably would have started with a â2â but now itâs a â4â (maybe even a 5 going off a quick Google).
So yeah, technically you are correct, rates havenât gone up by 75%, theyâve gone up by 2750% (cash rate) and ~100% (average good variable mortgage rate).
The landlord is actually being nice to you, as hard as that is to believe.
dear lord!
The landlord is actually being nice to you, as hard as that is to believe.
Dropped in the thread to make a VERY similar observation.
People generally look at the absolute cash rate and not the relative month-on-month cumulative increases.
And cost of funds is just the start of it. Accountants are charging more. Strata services have gone through the roof (find me a tradie that hasn't bumped their carded rates!). And on it goes.
We pinned the rate increase for our investment property to under 10% last month because we have great tenants and we want to help them. We can also afford to wear a bit of the pain (not indefinitely of course).
The landlord is actually being nice to you, as hard as that is to believe.
assuming the landlords also dropped the rents by similar amounts as the interest rates declined from say 2010->2020 right?
I see this so often, and it just doesn't stack up as an argument. (Not picking on you specifically, just this general premise)
As a landlord you are not a producer who has costs to pass on and who would not be able to produce if you couldn't raise the price.
If an apple farmer's costs go up, and the market price can no longer cover those costs, the outcome is no more apples (or less competition, but let's keep it simple here). This is bad for the farmer (loss of livelihood) and bad for the consumer (no apples). So there is mutual benefit to raising the price.
If a landlord's costs go up, and the market price can no longer cover those costs, the outcome is bad for the landlord, but the number of available homes does not change, and if anything it provides downward pressure on house prices and rents. This is good for renters and people looking to get into the market. So absolutely, from the POV of the landlord they want to pass on the costs. But there is nothing "fair" or "nice" about passing on any of them. It is simply those who have power and wealth being able to impose their costs on those who don't. So let's not dress it up as some egalitarian clap-trap please.
(And I say this as someone whose personal loan repayments have, indeed, doubled)
@mtr: This.
Housing is firstly a necessity, it is far from an investment. It's very damaging to an economy to have such system. But we've let the tables turn in Australia, with the critical point around 2005.
The ones who will pay are the poor who are wealth-trapped. The have-nots are happens to mostly be the younger generation (5yo-35yo). While the haves can enjoy an easy retirement, plenty of travel and leisure, etc etc. Unless they're wasting their equity and paying The Banker, who wins in all of this, wether the market is going up or down.
We just lack the wisdom to act, and it's not unique compared to other first-world cities/nations. I think some places are doing good (Iceland, Japan, Singapore) as prices are cooling or getting more indicative of the standards of living.
@Kangal: What do you mean far from an investment?
Wall Street hedge funds are buying European and 5 eyes countries houses purely for investment purposes, en masse. They are squeezing as much money as possible out of housing worldwide in a race to the bottom.
And for the poorest and 'middle class' - it's survival of the fittest.
@Skinnerr: I didn't word it well.
Housing is a basic necessity like Air, Water, Food, Electricity and other needs like Healthcare, Education, and Protection.
Investments are ventures with the primary goal of using value with risk and time to generate more money.
Wisdom is to not mix such a mechanism with Basal Needs. We should be using investment mechanisms more for Wants or Luxury. Imagine if Clean Air became a Luxury or Investment, as far-fetched as that sounds it's not an impossibility.
…yes, it is happening. Humans are treating Housing as a Luxury/Want and mixing it up as an Investment. This is creating a diseased market. So we're losing the meaning of Housing as a Necessity.
We just lack the wisdom to act, and it's not unique compared to other first-world cities/nations.
Well Labor did go to the 2016 and 2019 elections with a policy to abolish negative gearing didn't they? Yet the majority of Australians didn't vote for that, and now all parties realise that abolishing negative gearing is a sure-fire way to lose an election. So now no parties will even come close to mentioning that in their election policies.
Property investing is a cancer, I personally think people should not be allowed to own >1 IP, and if they want to own >1 they should be taxed up the arse for it. But Australia disagrees with this. I would say the average Australian isn't well educated in terms of finance and economics, most people see property investing as an automatic way to earn $600 a week (or whatever the market rental rate is) scot-free, and that investing in the sharemarket is basically the same as going to the casino. They don't think about the risks involved like getting shitty tenants, depreciation, repair costs, property managers who sit at their desks watching pornhub all day, and — on the horizon — climate change.
@Ghost47: Use a repayment calculator and you'll see negative gearing becomes at some point positive gearing.
Unless you want to live perpetually in negative cash flow like it is some kind of smart move. It really isn't especially on a large loan and a long life asset like property. Property can out live you and you could ruin your health paying it off.
It is simply those who have power and wealth being able to impose their costs on those who don't.
Exactly. Our society is moving more and more towards this kind of system as the years go by.
This is good for renters and people looking to get into the market.
So OP shouldn't complain right? Great for OP.
And I say this as someone whose personal loan repayments have, indeed, doubled
That is not smart.
Some truth bombs right here.
The landlord is only being nice to themselves.
Shitty decision making on loan, now passing their problem on to their tenants.
your average interest went up by approx $500 peek, which pretty much translates into your 1k increase per fornight.
2.75% interest increase on a 1,000,000 loanl;
Which is exactly what your landlord has increased it for.
seems legit.
Lol my rate went from 2.49 to 4.77….Pretty sure a lot of rates are almost hitting double since loan inception.
Your not fixing? Crazy
@Korban Dallas: I didn't fix back then (Obtained loan end of 2019). I think the fixed rate back then was somewhat much higher than the 2.49% variable and probably would've broken even if I had gone fixed rate till now.
Saying that my point of this reply was that OP claimed interest rates didn't go up 75% but depending on the scenario (when the investor obtained loan, fixed vs variable, value of property etc), they may just be simply passing the cost of interest over that went up dramatically in the past 3-4 years.
Another potential factor for the rent increase is that renters got 'bargain' rent discounts during the initial covid blowout where it was encouraged for landlords to lower rent for those in financial difficulties e.g. lost jobs due to lockdown etc. So relatively the rent may have jumped from below market rate to market rate + interest rate hike.
No sympathy here. Property investors need to take the good with the bad. If they have to absorb some cost increases, so be it. They have enjoyed a decade of spectacular capital appreciation.
Not to mention how crazy it is to have a system where landlords can mortgage themselves up to the hilt, often on multiple properties.
Landlord chose to take the risk, not the tenant.
What if there had been a sensible increase in supply, or huge unemployment, or something, and so NO tenant was willing or able to pay the 1250 a week?
Rent has gone up, this is the reality, but it's obviously the result of our broken system.
its a free market to charge what you want, u have to move, welcome to the club
I'd think they may be trying to move you out and this is the best way they can.
All you could maybe do is get comparative estimates of similar properties and go back to them.
Else just move out.
Rents are effed. Investors that got in at the peak are now realising what interest is and they're trying to put it onto the little guy.
I'd happily bail and let them keep their depreciating asset than play their game.
My lease has already expired 2 weeks ago. If they want to kick me out they already can.
I've been reading out landlords favour quality tenants over higher rent prices. Over the past 2 years I've had 0 R&M request and no complaints from the RA during inspections
To kick you out they'd have to give you 8 weeks notice (at least in the ACT they would), so easier on them if you choose to leave
its 90 days in NSW if they wish to evict you
To kick you out they'd have to give you 8 weeks notice (at least in the ACT they would), so easier on them if you choose to leave
Try again. It's 26 weeks in ACT and increases are capped at CPI.
You still have options mate. Get out and find another place with cheaper rent. You can rent out a 5 bedroom house in the inner west for 800 p/w. That's what my mate does with his friends so only 200 each.
I'd happily bail and let them keep their depreciating asset than play their game.
I don't get what you're trying to say - if the landlord is asking for market rates (which based on OP's comments, they are), then what would you suggest? Bail then sleep on the street?
Investors that got in at the peak are now realising what interest is and they're trying to put it onto the little guy.
This ignores the serious fiscal and monetary policy failures of the past few years. By painting the landlord out to be some sort of "evil" person, you're scapegoating for who's truly responsible for the housing crisis we find ourselves in.
I've got no sympathy for landlords, they are investors and they ought to bear the risk they signed up for, however, to expect a landlord to accept lower than market rents for "moral" reasons sounds silly.
I agree that Landlords are hardly the altruistic people that Realestate.com. and Domain like to make them out to be (and who they think they may be) and yes we have been lagging in developing infrastructure over the last 10 years.
However
I firmly believe a certain government who was in power for the last decade was singlehandedly driving Australia into the ground to the benefit of their developer and banker mates.
Jack up immigration to ridiculous levels to cover the reality of a negative population growth rate.
Deal with the secondary issues of inadequate supply of infrastructure later and kick the can down the road, blaming developers for not building enough.
I'm interested to know what you get for $1430 a fortnight.
2 bed, 2 bath, 1 carspace. It was good rate
Surely the CBD is the worst place to live though? Do you not wfh like everyone else now?
Seems a waste for 1 person
Nah I love it, I also work in CBD so I walk to work.
CBD is a great place to live if you can afford it. Walk to work, no commute, buildings have gyms, pools, sauna, cinema theatrette, billiard/pingpong games room, 24/7 security that picks up your parcels, amenities everywhere, midnight closing supermarkets close-by, so many food options everywhere, walk around everywhere, Darling Harbour, Barangaroo, Circular Quay, Hyde/Botanical/Domain parks all footsteps away, 10 mins drive to get out to any direction you want, whether North heading across Harbour Bridge and beyond or West towards Blue Mountains.
Also, Amazon delivers games/products on launch day. Otherwise, next day orders delivered (ordered that Logitech G502 mouse 1AM last night and was delivered 10 hours later at 11AM). Not to mention many companies offer free CBD delivery.
If you're a bustling city dweller type, it literally has everything you want for daily living with easy access to when you want something else.
Been living here for over 10 years, love it!
Still great even tho I'm 100% WFH.
For that setup in Sydney CBD, $715/week is a STEAL mate! Even $1250/wk in the CBD is a pretty good deal if it's a well-presented apartment. I mean, in Haymarket that secure carpark space is probably worth $150/wk alone as a dodgy cash-in-hand arrangement.
Have a look around the power poles near World Square. Plenty of freshly-leased 2bed+2bath apartments with the leasee trying to find another four people willing to share it and pay $450ea per week (including "free power, internet and rice").
Time to get a flatmate or find a new place to live.
A lot of Haymarktians will only live in Haymarket, with other Haymarktians. They accept a room of many instead of their own as they are used to living like that. Or are overly desperate to avoid any form of travel to Uni and shops.
At least you're not doing it Hong Kong style literally living and sleeping in cages. Sadly $2.5k is now the going rate for you're area. Blame the system that prints money and lowers interest rates to record lows and then jacks it when people are most vulnerable.
$1430 is not an appropriate price for 2/2/1 in Sydney CBD. I was paying approx $2400 for a studio with no capark in 2018.
Suprised you can get this for less than $3000, unless it is very run down.
You paid 2.4k per week in 2018? You must have a very well paying job
Insane, that's more than my monthly mortgage repayments!!! Sharing or by yourself???
by myself, looks like I need to share now
Exactly what I was thinking, mate, move to Melbourne, similar in South Bank is 850/wk. Walk to everywhere.
Is the rental worth $2500 a fortnight? Is that the market rent?
If yes, you had a good run at the reduced rate.
And importantly, what does your lease say with respect to rental increases and notice periods?
Surrounding areas is around $2000 - $2500 a fortnight. So $2500 is on the high end
Well my lease has expired so they can increase the rent, the letter is giving me 60 days notice.
why do you need 2 bedrooms 2 bathrooms for yourself alone ?
Speaking as someone who lives alone and has 1br - I own too much stuff and would love to be able to spread it out over more area rather than feel like I have nowhere to put anything.
As for a second bathroom, I'd love to have a guest not have to walk through my bedroom to the ensuite single bathroom.
Have you been a problem tenant? Wanted a lot of minor things fixed?
One strategy is to raise the rent an additional amount if the tenant is a pain in the ass.
No
I pay my rent on time (I set automatic payments a day before its due), look after the place as my own and have not requested 1 repair in this apartment since I've been living here.
My lease expired 2 weeks ago, if they wanted me out, they could've sent me the rent increase letter 2 months ago so it can start the day after my lease ended.
I'd feel so shitty as a landlord if I raised rent in the middle of someone's lease. I'd rather go at the start of the lease renewal. I guess some are real scumbags.
Their lease expired 2 weeks ago so seems reasonable timing.
Makes sense. Still seems an excessive jump.
Nah it's inline with average market value. OP just had it really good previously.
@Clear: % hike is not the way to compare
just compare what's on the market available for 2beds 2baths 1carpark in Sydney CBD
Negged by 7 shitty landlords haha
I can only say I wished I had started playing Monopoly years ago. :+)
What a rort 75% lol time to head north OP and get out of suckhole Sydney
Indeed. Doshed up retirees in the centre leaves the bigger houses in the suburbs for growing families.
That's brutal, am I not the right person?
I'm nice, well presented, pay my rent on time, look after the place as my own and have no requested 1 repair in this apartment in the last 2 years i've been living here.
Holy crap. $2500pf for only an apartment?
Yes correct
You are, but no longer for a 2 bedder since you're being priced out.
you're suss.
the 'right' people?
Despite what rich snobs living in Sydney might think; Red Rooster is amazing and Western Sydney is actually an awesome melting pot of cultures.
Same for climbing interest rates. The ones that can't afford their mortgages are going to be caught out and be given a hard dose of reality.
$2500 a fortnight?
For rent?
A few of my friends their home loans range between $500 and $1000 a fortnight though we are in regional Victoria.
Cant see the fascination of people for the CBDs of major cities most of the fun things to do in the CBDs cost money as well.
In the OP's case, they work in the CBD.
In the OP's case, they work in the CBD for their landlord.
It depends where you're in at life
If you're young with loads of energy to party, then that's what makes CBD fascinating for you.
If you have kids etc, then most people venture out to the western side of Sydney
I've been out to the inner west like burwood, straithfield,chatswood etc - most of those suburb goes quiet after 9:30pm even on weekends. Where as in CBD the night has just begun and its all vibing
I don't understand why more people aren't moving to the St George area, such as Mortdale, Penshurst, etc. From Mortdale you can catch a train to the CBD, or go the other way and go to Cronulla.
Why catch a train to the city for work when you can walk instead?
Because using the Princes Hwy in and out of the CBD sucks.
Sydney's problems are mainly to do with horrendous infrastructure, geography, brainless companies that insist workers need to migrate like wilderbeests into a central CBD to work. It's problems shared but greater than other capital cities. On top of that, it's now raining record numbers of new arrivals all competing for that same rental pool. And then on top of that, like most other places, it's full of amateur landlord "mum and dad" / "battler" "investors" sucking at the teet of tax rorts and taking more than their fare share of the pie.
The price you pay for living in the CBD. It was cheaper when nobody wanted to be there.
FWIW, youâd be able to rent a beach house for that money. Or a whole ass farm generating an income. Depends on whatâs important to you I guess.
Gee, good thing Negative Gearing keeps rents down /s
You have to rember that by putting up the rent then the LL negative gears less. So more tax paid.
From a different perspective, I locked in 12 months with my tenant at $40 a month increase. loan repayment for oct last year was $1077. Oct this year $2012. I doubt any tenant is saying its unfair that I have to wear this till may next year…..bleeding pretty hard atm, but just gotta push through
Make them an offer of 7.5% increase or just walk away.