Should Rents Be Capped?

Lhawkshead on 29/12/2022 - 11:33
Last edited 29/12/2022 - 15:58

I dont really understand finance, so there's probably some big brain banker who thinks different.

Why is my rent going up because my landlord's mortgage is going up?
I didn't take out a loan on a home I won't live in. I'm not getting more house, im not getting better services? they havn't improved the house in any tangible way.

I think if rents were capped based on objective features of a house like rooms, amenteties, idk water efficiency? like actual tangible definable things it would be good for people.

I get that might mean that investors can't afford their mortgages, but why are we basing housing on the reckless financial decisions of investors? if you can't afford that 2nd or 3rd property maybe you should just sell it? and not make tennants pay for what you can't afford.

The banks and landlords have had decades to tackle homelessness and they havn't. Maybe their way isnt actually good.

Maybe this would just have aweful consequences though. So apart from rampant greed what would go wrong with capping rents?

(EDIT) I really appreciate the perspectives and comparisons between attempts in other parts of the world as a way to explain things. Keep em coming.

Poll Options expired

  • 89
    Cap rents based on objective features of a property
  • 601
    Don't cap rents based on objective features of a property
  • 11
    Cap rents based on things like income amounts
  • 13
    Don't cap rents based on things like income amounts
Financial Rent

Comments

    • JohnHowardsEyebrows on 30/12/2022 - 05:59
      -3

      More legitimate home buyers will exit the rental market, so it evens out. The self indulgence of your kind is off the charts.

      • DV0993 on 30/12/2022 - 07:23
        +2

        Correct - But it won't be enough to reduce rental demand to a point where its going backwards.

        The lefty comment at the end was unneccessary

      • Quantumcat on 30/12/2022 - 09:45
        +2

        Many people have to rent no matter what prices houses are - moving a lot, no deposit ready etc. Having less supply will push rents up for them. For the people who can't buy because they don't have a deposit, this makes it even more impossible to save a deposit.

        • JohnHowardsEyebrows on 31/12/2022 - 08:33
          -1

          Less supply on account of more owner occupiers doesn't push up rents.

          Your argument implies landlords selling up means houses are sitting vacant. It's a self serving nonsense.

          • Quantumcat on 31/12/2022 - 08:56
            +1

            @JohnHowardsEyebrows: Any rental that's sold can be turned into an air bnbs or a personal holiday home for the next owner. Selling rentals means either the supply staying the same, or reducing (with an equivalent reduction in demand, if a first time owner occupier), or reducing (with no equivalent reduction in demand, if turned into an air bnb or a personal holiday home). Even if the next owner keeps it as a rental, there is a period of time that it is off the rental market while it is being shown and sold. The more selling activity the fewer homes are available to rent at any particular time.

  • Dack Smith on 29/12/2022 - 18:23
    -1

    Rents should be capped.

    People should not be profiting off the misery of battlers trying to put food on the table.

    It’s un-Australian to say the least.

    Greedy people and corporations should be asked to leave this country for good

    • Extreme on 30/12/2022 - 09:08
      +5

      So you’re saying that farmers & businesses shouldn’t be profiting off your need to eat either?

      What about take away food services & restaurants? Should they be able to make a profit?

    • Ghost47 on 30/12/2022 - 17:37
      +1

      It’s un-Australian to say the least.

      This comment might make some sense if we were in the 90s, but we aren't and these days Australia is very much about "f*** you, got mine".

      Just look at 99% of these comments; no sympathy at all for renters and lots of sympathy for landlords, who seemingly should not be at risk of losing any money at all when they invest in property. People here seem to think that landlords seem to take on heaps of risk as if they're gambling at a casino, even though we all know that the government wouldn't let house prices drop, that's why they've opened the immigration floodgates.

  • kylarstern on 29/12/2022 - 18:56
    +1

    Lol supply and demand mate. Did you actually do some research before launching your ignorant self into this?
    Loving the comments

  • jjjaar on 29/12/2022 - 19:37
    +4

    Some really interesting points in this thread.

    My favourite is the argument that rent capping is a handout for renters, and “Who will pay for it? Better not be the government!” and in the same breath, stating that “This is a free market!” but failing to acknowledge that ~60% of landlords are negatively gearing these properties… which is a government handout. Not exactly a free market…

    • DV0993 on 29/12/2022 - 22:44
      +3

      Yeah - for the other 40% rent is taxable income.

      Goes both ways.

    • Extreme on 30/12/2022 - 09:10
      +3

      Those properties that are negative geared ultimately are a result of lower rental prices.

      If the rental income was higher, the property would generate a profit and the landlord would be required to pay additional income tax.

      Doing away with negative gearing, means rental prices would need to increase for 60% of property investment to become viable.

      As such, negative gearing ultimately leads to lower rental prices for tenants.

      • Ghost47 on 02/01/2023 - 01:43

        for 60% of property investment to become viable.

        Investing in anything does not inherently guarantee any sort of return despite what property investors are now ingrained to think.

        • Extreme on 02/01/2023 - 09:12

          I never said it did. Like any investment, people invest money to make a return. That isn’t limited to property investors.

          Remove incentives and you also reduce supply.

          Is that your answer to fixing the rental shortage crisis the country is facing? Because if it is, you’re in for a world of pain.

  • orangetrain on 29/12/2022 - 19:42

    Your rent is going up because they know that they can find some other tenant if you say no, especially with no-cause evictions.

    I think capping rent would actually decrease rent but at same time increase homelessness. So, if you're already an attractive renter (ie, well-paying job + no kids/pets), it can actually benefit you.

    Want cheaper rent for everyone? Vote for pro-housing/renter political parties.

  • FlyingMiffy on 29/12/2022 - 20:10
    +2

    Another "why isnt the world easier for me" post. Get a job, work harder and get some control of your own destiny. In the meantime, get yourself a box of tissues and wipe those tears.

    • nobro25 on 03/01/2023 - 10:45

      What you mean? Getting a job is not hard. It's getting a job that pays well with minimal work is hard. Why? Because humans are entitled pricks, apparently!

  • IM-Cheap on 29/12/2022 - 20:18
    +2

    Everyone is raising rent because everyone's cost base is increasing. If everyone raises rent and people are able to pay it the price is fair. The hard truth about supply and demand is if all rents go up in the area and you can't pay it a landlord will find someone else who can - otherwise they would not be able to raise rent and would need to reduce the price.

    Eventually the price will hit what the market will tolerate and they either rent for less or sell up.

  • randomusername2017 on 29/12/2022 - 20:43
    +1

    ✅..should be able to upvote forum topics.. probably the best laugh outside of a Pam thread in ages…

  • Bammers on 29/12/2022 - 21:01
    +2

    Who would buy an investment property to rent to someone and have their ROI capped? What is the point in this?

    If costs, go up so does rent - if the tenant doesn't dig this go buy their own place and not worry about rent increases?

    I'm a renter and even I can see the logic in this…..

  • May4th on 29/12/2022 - 21:19
    +1

    sure. let's cap the price of bread, milk, petrol, utilities, condoms, pads and other essential supplies as well. let's scrap rent and home ownership together and have state allocate housing and resources for us. long live socialism

  • Wasabi Ninja on 29/12/2022 - 21:54
    +3

    Renters sort out the smart people from the poor peole. Never hear someone doing well for themselves complaining about the cost of rent. Never hear a smart person having financial problems. Waiting for the smart people to upvote and the poor people to down vote.

  • newbiesh on 29/12/2022 - 22:49

    as a landlord i had my rents the same as 2019!
    but next year when their lease ends I have to increase.
    I used to pay 2% interest now paying 6%.

    GOV should make ASX interesting so ppl can dump their money on, investing into stocks is just a jk here in Australia but properties are just sexy mofos

  • SteveD on 29/12/2022 - 22:50
    +3

    I wonder if OP complained similarly when the rent was low for years now? Did OP ask the landlord during these years that he was happy to pay more rent than it was advertised for as it has all the amenities that OP wanted in a rental place?

    • JohnHowardsEyebrows on 30/12/2022 - 05:58
      -4

      The rent wasn't ever low…it was priced at whatever the market would pay. Now the spivs (presumably you're one of them) are using interest rates as an excuse to collectively suck more blood out of those without houses.

      • barratttc on 30/12/2022 - 07:38
        +4

        As a landlord I would happily suck more blood out of your socialist self. Go get a job and buy your own house!

        • JohnHowardsEyebrows on 31/12/2022 - 08:35

          I own my home. I'm just not a parasite like you.

          • DV0993 on 31/12/2022 - 15:39
            -1

            @JohnHowardsEyebrows: Wow - With an attitude like that no wonder you haven't thrived.

            Your comments exude jealousy. Work harder.

            • JohnHowardsEyebrows on 01/01/2023 - 10:57

              @DV0993: So the idiot before me doesnt have an attitude: 'anyone who disagrees with me is unemployed etc etc'?

              I stand by my parasite comment. You stick your hand out for taxpayer handouts like negative gearing, then act like you're self made.

      • Extreme on 30/12/2022 - 08:30
        +1

        Rent was fair in comparison to ownership costs.

        Ownership costs are sky rocketing, which is why rents are also sky rocketing.

        Landlords and property managers aren’t there to provide you with housing at a loss. They take on the risk to generate a profit.

        One of my properties has seen interest increase from $500/month to over $1100/month since September. Rent received is $400/wk. That means an additional 37.5% of rent received now needs to go towards paying loan interest.

        You can mention capital growth. But the fact is, that growth isn’t realised until I dispose of the asset. That growth also doesn’t pay the holding costs of the property.

      • May4th on 30/12/2022 - 09:15
        +5

        The rent wasn't ever low…it was priced at whatever the market would pay.

        So it's only market forces when it's low but when it's high (subjectively) suddenly it's due to landlords' greed.

        Are you hearing yourself?

        • JohnHowardsEyebrows on 31/12/2022 - 08:40

          I get why the nuance escapes you. My argument is that prices are only so high because property spivs are willing to take losses due to expectation of capital gain, ie they overpay willingly. Now that their costs have unexpectedly blown out due to interest rates going up, they're sooking about it. The market is working (albeit perversely), but the self serving arguments about how rents were supposedly low, is what I'm pointing out.

  • Max P on 29/12/2022 - 23:08
    -4

    How about we just abolish landlords instead

    Rent is a tax that poor people pay to rich people to live in society

    • cheapaschips on 30/12/2022 - 01:37
      +10

      Rich people ? I and many others I know started with nothing..I personally grew up with just basics and no expensive toys, vacations or brand name clothes ,shoes.

      Ive worked since I was 18 and own an IP because of saving every extra dollar and not going out every weekend or ordering takeout.

      After many years working a normal job I had enough for a deposit on home and eventually doing the same an IP(with a large mortgage ) . These are in areas I can afford nowhere near the CBD.

      Now either do the same or keep renting…so many people want a hand out without any sacrifice. It's easily achievable but takes time many years of sacrifice and saving. It was not overnight or even a few years.

      "rich people" indeed …I wish mate………

      • Wasabi Ninja on 30/12/2022 - 02:46
        +8

        Poor people use the word rich to describe smart people. It’s as simple as that.

  • Some Human on 30/12/2022 - 00:05
    +2

    From my experience, rent only ever goes up.

    Don't like it? Buy a house. You will thank yourself when you come to retire.

  • hasher22 on 30/12/2022 - 02:17

    Land and homes shouldn't have been investments in the first place, bring back 70's and early 80's where homes were just….. assets like a car.

  • JohnHowardsEyebrows on 30/12/2022 - 05:56

    Just to outline how this works:

    • Tax dodges like negative gearing and CGT make property worth investing in, despite making losses on rents.
    • Cheap finance exacerbates problem, with prices pushed even more irrationally higher.
    • interest rates go up, idiot speculators then demand to be compensated by renters, many of whom were denied home ownership by speculators pushing prices higher to begin with.

    Given OzBargain attracts a lot of greedy speculator types, I won't be surprised if my post gets negged out, but you can be sure the only ones disagreeing will be self-interested speculators.

    • barratttc on 30/12/2022 - 07:40

      Boohoo mate. But what and where you can afford.

    • Extreme on 30/12/2022 - 08:39
      +2

      Just to outline, some things you haven’t considered form the flip side:

      1. Without negative gearing, the number of rental properties would be severely limited. Meaning higher demand for fewer properties for those who can least afford it. Being able to offset losses against other income, makes property investing viable for mum & dad investors.

      2. Cheap finance kept a lot of businesses open during the pandemic. It kept people employed and earning income, so they could feed themselves.

      3. Interest rates go up, they go down. Rents go up, just like wages also go up. Just like the price of lettuce goes up and goes down. If you can’t afford the increased rent, you have the option of downsizing/relocating and/or seeking social housing. Just like you had the option of buying cabbage when the price of lettuce went up.

      A landlord doesn’t give a crap if you can’t afford the increased rent. They’ll find someone who can.

      • cobknob on 30/12/2022 - 16:43

        Cheap finance kept a lot of businesses open during the pandemic. It kept people employed and earning income, so they could feed themselves.

        So did government support lol. Some businesses were dumb dumbs. Poorly adapted. For example restaurants not willing to cater to takeaway options. If your food taste good and you had regular clients they'll still buy from you takeaway.

        Interest rates go up, they go down. Rents go up, just like wages also go up.

        Wages go up lol. Maybe public sector. If you've read anything in the last few years, wage growth is like a turd that sat on a footpath with no wind, flies or rain to take it away - at the same place.

        Seeking social housing.

        Have you been. Only now are people who were on the list in 2009 getting places in WA. WTF! *With the exception of extreme cases.

        Just like you had the option of buying cabbage when the price of lettuce went up.

        That was a farce! lol

    • cobknob on 30/12/2022 - 16:35

      Tax dodges like negative gearing and CGT make property worth investing in, despite making losses on rents.
      Cheap finance exacerbates problem, with prices pushed even more irrationally higher.
      Interest rates go up, idiot speculators then demand to be compensated by renters, many of whom were denied home ownership by speculators pushing prices higher to begin with.

      Given OzBargain attracts a lot of greedy speculator types, I won't be surprised if my post gets negged out, but you can be sure the only ones disagreeing will be self-interested speculators.

      Well said. Lot more to add to your list but like you mentioned you'll get those self-interested speculators lol

  • barratttc on 30/12/2022 - 07:20
    +3

    Your first sentence pretty much sums up everything you've said… "I don't really understand finance. "

  • DarkOz on 30/12/2022 - 07:36
    +2

    Supply and demand 101. This is a government designed, controlled and manipulated Ponzi scheme for over 2 decades. Lower the supply by not building enough social housing and increase the demand by more skilled and rich immigrants and high returning property investments.

    No one cares how much the properties are worth or how much the mortgage repayments are. As long as there is a shortage of rental properties and people are dying to rent them the prices would only go higher and higher. If you think the rental prices are not justified then don't rent and go buy your own house instead.

    • Extreme on 30/12/2022 - 08:42

      Of course rents will keep going higher and higher.

      Even more so once you factor the entry costs(purchase price and/or building costs) are going up. Then you’ve also got higher holding costs as a result.

      As such, when a property costs more to buy & hold, it’s naturally going to cost more to rent.

    • cobknob on 30/12/2022 - 16:48
      +1

      Supply and demand 101. This is a government designed, controlled and manipulated Ponzi scheme for over 2 decades. Lower the supply by not building enough social housing and increase the demand by more skilled and rich immigrants and high returning property investments.

      Your reasoning has some merit. The government should never have offered the building industry or new home owners any grants or incentives since the pandemic started.

  • tabitha731 on 30/12/2022 - 08:28
    +1

    Why should tent be capoed?! Coz u as a renter cant afford to live whee u WANT to live? The problem is you! change ur expectations, you cant live a champagne lifestyle on a beer budget. Tour choice to rent.. remember that!

  • Waltervp on 30/12/2022 - 08:40
    +1

    In other worlds mortgages have life time interest rates, not variable. You buy a house with x% mortgage and that is it for 30yrs. At least people know what they are committing to!
    In other worlds there is tenancy protection and rents can only go up with cpi index and you can get life time rentals, meaning you can stay however long in the home and you may even renovate bathroom or kitchen or build a deck - with owners permission. In Australia the average tenancy is 18 months, which is super stressful for families and enormous costs of moving and possibly changing schools etc each time.
    In Australia we do things plain wrong wrt housing, And focus is on landlords convenience!!!!

  • Powlie85 on 30/12/2022 - 09:02

    Definable things? The administration of this would drive rents up. Define and add ever little feature in a contract. Who's got time for that?

    • cobknob on 30/12/2022 - 16:54

      The basic features could be added - nothing too overly complex. Eg. Security(Screens/Locks/Alarms/Doors), AC, Phone line, etc to name a few. Was a web developer for 10+ years and the real estate websites are absolutely crap. Even the application systems to apply are shitty. Doesn't take a genius to rework those sites and systems to make things better. And most real estate agents are just idiots, grab a digital camera and photograph every room after tenants have cleaned and moved out = put through a web image optimizer and use on real estate website.

      Australia is still backwards in the developed world and will remain that way for some time to come and not only because of this but in many other aspects that exist here.

  • echelon6 on 30/12/2022 - 09:03
    +2

    Since you say you don't understand finance (this is an economics topic actually) I guess you deserve a patient answer.

    If you cap the price of any economic good, whether it be housing or fruit or services or anything, it distorts the allocation of resources away from the optimum amount in an economy. For example, capping rents will discourage landlords from supplying rental housing and you end up with black markets where people pay more for lower quality, while the total number of rentals go way down, and more people need to seek alternatives to renting (whether that be homelessness, moving back in with parents etc).

    The same is true in the other direction - we shouldn't subsidise any economic good either (with exceptions - beyond scope) because it will increase supply beyond the optimum amount in an economy.

    • ymmf on 30/12/2022 - 09:40

      The reality is property as an investment is subsidised (negative gearing, CGT exemption).

      Despite the understanding that getting people to pile lots of money into non-productive assets (i.e. a house) is not good for the productivity of a country, it is a politically hot potato for any politicians as 2/3 of voters are house owners in Australia.

      It will take a leader with long-term vision and strategy to deal with this problem, which in a 3-year election cycle is very difficult.

      • Extreme on 30/12/2022 - 11:35
        +2

        The reality is, those subsidies go towards keeping rent prices low.

        If offsetting losses against other income wasn’t possible, then it would mean a large number of investment properties wouldn’t be viable.

        As such, those landlords would sell up(or increase rent), reducing the number of available rentals for those who can’t afford to buy.

        Those subsidies(which aren’t just limited to property investment mind you), go a long way towards increasing supply.

        • ymmf on 30/12/2022 - 15:14

          This is the common argument. But:

          1. The subsidies spent to sponsor investors could also be used to build housing. It stops making the rich richer;

          2. Making properties less appealing for investment purpose means some of those who couldn't otherwise afford can afford;

          3. Why would people want to invest in a loss producing product? This again is another reason for loss of productivity when people pile money into real estate.

          • Extreme on 02/01/2023 - 11:46

            @ymmf: 1 & 2 would both result in lower prices overall yeah?

            If so, that then results in reduced government revenue through stamp duty.

            1. Correct. Which would see an exodus of property investors, meaning those who couldn’t afford to buy, would be stuck at the bottom of the food chain for fighting for what few remaining rentals there are. Likely at increased prices.

            If you play around with the existing system, you’ve got to be prepared for things to not work out as intended and for negative effects to also occur.

            The reality is, the only way to reduce rental prices is to increase rental supply. Either through increasing incentives for private investing, or more government investment.

            If you’re opting for more government investment, then the revenue for that to occur, needs to come from somewhere.

      • irony on 31/12/2022 - 08:06
        +2

        Property investment has no "CGT exemption", as you put it. As with all CG it is tax at half its value and added to income, which as property delivers a single, large, gain over time means it is largely taxed at the highest marginal rate.
        You might be thinking "why is CG taxed at 50% discount?". The answer is inflation. Prior to the discount each asset had a cost base, where the "real value" was set in the FY it was purchased and then increased by the rate of inflation each year. So a $100 asset held over 10 years with 4% would be valued at $148 for CG purposes. This was very complex for companies and people with many assest, and the ATO, so to simplify they use a CGT discount to approximate inflation.
        If you don't understand the concept of "real value" please leave the conversation, undertake some study of economics, then rejoin.
        If negative gearing is removed, losses will simply accumulate and be applied in a future tax return, so I don't think it should put off most property investors. No one should be investing to have a long term position of negative gearing, negative means it is a loss, at most they get half that back on income tax, the other half comes out of their pocket. Given an investor average income of $80k, their Income tax rate is only 30%, so they are paying 70% out of pocket. https://intheblack.cpaaustralia.com.au/economy/property-inve…

      • echelon6 on 31/12/2022 - 09:04
        +1

        No, the current system simply treats investment properties the same way it treats all other investment asset classes, e.g. shares. You can negatively gear shares and other investments too. And as the poster said, there's no CGT exemption, you're confusing this with the PPOR CGT exemption.

        • ymmf on 31/12/2022 - 12:13

          I am fully aware of the 50% discount on CGT, and I am also fully aware of the depreciation schedule and it's 50% discount, which gets added back to the CG.

          But you pointed out the exact problem - treating property as an investment. It is much more favourable to invest in productive businesses.

          I also suggest people who try to reduce housing to an economic calculation to understand the social impact to a society.

          • echelon6 on 01/01/2023 - 10:39

            @ymmf: Well no, it shouldn't be the govt's role to dictate by way of policy distortions what is a desirable or undesirable investment class. Why not? floodgates, slippery slope, we are a free country, economic inefficiency, deadweight loss etc. Even if you wanted to invest in pokemon cards, stamps, coins or crypto and you borrowed money to finance it, it can be negatively geared, it gets LTCG 50% discount etc. Let the market guide resource allocation - if property is such a good investment class, developers have more incentive to increase supply.

            • ymmf on 01/01/2023 - 11:56

              @echelon6: By the same token, it is also undesirable for the government to invest in health as anyone who has retired is a liability to the economy. From an economy point of view, we should also encourage people to smoke because 1. they bring tax revenue; 2. these people die at their 60s just after they have finished their productive, tax-paying life and thus do not become a burden in aged care.

              Pokemon card, stamps, and cryptos are not necessities, having a roof is.

              • echelon6 on 02/01/2023 - 11:00

                @ymmf: Lol good point actually - yes if we want to strictly simply maximise value output then maybe we should not care about the wellbeing of people after retirement and best if they drop off before the age pension. But… I guess that's where I personally would draw the line and begin to agree with your side.

                On point 2, nah I disagree, housing - yes, it's a necessity, but should be subject to the same economic forces that bring about maximum efficiency re resource allocation. Otherwise where do you draw the line? cars, food, lots of general goods and services, can be framed as a necessity too. Lump them all together and let the free markets allocate resources efficiently, and regulate only where there is market failure.

                • ymmf on 02/01/2023 - 11:45

                  @echelon6: Don't get me wrong, I don't think we should put cap on rental either. I see your point on where to draw the line.

                  But at the same time IMHO when housing, the single biggest household expense, is affecting productivity of a country (my version of "market failure"), some intervention should be considered. I do not want to see a future where properties can only be inherited not earned.

                  • Extreme on 02/01/2023 - 12:26

                    @ymmf: The reality is tho, land is a natural resource. There’s only so much of it. It’s not infinite.

                    Which is why property costs are going up disproportionately to inflation.

                    As more and more people want to live in the same spot, the cost of that land will go up.

                    I’m sorry to say it, but if you want cheaper housing, you’ve gotta be prepared to move to a cheaper, less desirable area.

                    The only way for governments across the world to keep housing costs under control is through increased density, or infrastructure investment in less desirable locations, making them more desirable for people to live.

                    • ymmf on 02/01/2023 - 12:40

                      @Extreme: I absolutely agree that the infrastructure investment is lacking.

  • joshash on 30/12/2022 - 09:05
    +4

    Housing is a basic human need.
    When basic needs are unaffordable - they are a source of political instability.
    We need to fix this or we will regret it

    • Some Human on 30/12/2022 - 16:51

      Everyone should just "get a good job that pays good money"

      • cobknob on 30/12/2022 - 17:13

        Fantasy. Who's gonna serve that coffee you ordered lol

    • cobknob on 30/12/2022 - 17:15
      +1

      When basic needs are unaffordable - they are a source of political instability.
      We need to fix this or we will regret it

      I estimate well see some radicals in the next 5-10yrs. Whats happening in the US is inevitable here. People crack.

    • WinstonWithAY on 30/12/2022 - 19:49

      I wouldn't necessarily be angry if some of the landlords in this thread went the way their brothers did under Mao

  • jhaley3180 on 30/12/2022 - 09:34
    +2

    The basic problem the OPb is raising is supply of rental properties is not as high as demand. The solution isn't to implement policies that limit supply (like rent capping) the solution is complex supply side tweeks.

    From my point of view three major failures have led to the supply issues we have now;

    First is that the majority of people don't understand negative gearing, so bag the crap out of it to the point where a sensible conversation is impossible.

    Second, the failure of successive governments at all levels to invest in social housing over decades. Leaving this up to the private sector. Interestingly when large super funds are asked about why they don't invest in housing they site poor annual returns for the risk (even with tax incentives like negative gearing) amongst other things. If governments invested in low cost social housing, governments would be limiting private investors in this part of the market, providing a service that they are supposed to be there for, and holding stakes in an appreciating asset class. At the same time governments would be driving jobs in construction, renovation etc.

    Third, the transition of large numbers (hundreds of thousands) of rentals from traditional private rentals to Airbnb's. Complex issue but clearly a distortion at a time when large numbers of expatriates returned to Australia as a result of pandemic, when our country is in an ongoing (needed) growth cycle and when governments under invest in social housing.

    Not to mention a range of other factors like the slow removal of NRAS, slow and complex development decisions, poor public transport infrastructure, etc.

    Capping rents does nothing to manage these issues.

  • ToyotaCrownHybrid on 30/12/2022 - 10:02
    +2

    I've been in my car for 3 months; I go to inspections every day.
    Debt Free, have 80K in the bank, 110K/Yr income applied for over 90 houses ranging from $250/Week to $500/Week.
    Inspection I went to this morning at 9AM was listed yesterday at 3PM and there were over 40 people there, a small studio in the city at $520/week.

    Absolute madness how times have changed.

    Anyway, supply/demand rules, increase supply so available rentals outnumber the amount of people looking for a place and prices will be competitive again.

    • U4333439 on 30/12/2022 - 10:49
      +1

      I'm sorry for your situation, but surely you must be being picky about price/locality, or something else is off? If you're consistently offering the asking price and not getting it, offer more. I assume you're not telling them you're sleeping in your car?

      • ToyotaCrownHybrid on 30/12/2022 - 13:58

        Should I start telling them I live in a car?

        • U4333439 on 30/12/2022 - 15:09

          🙂 no, I don't expect that would help

      • Toph Beifong on 31/12/2022 - 00:53

        And what about the other 12 people who came to the inspection who also happen to live in a car?
        The competition in the rental and housing markets has pushed prices above asking price. That's why toyotacrownhybrid cannot secure a rental property

    • Shaddolf on 30/12/2022 - 11:35
      +2

      Does your job require you being in the city? Could you move elsewhere, where for $500 a week you can rent a 4br house?

      • ToyotaCrownHybrid on 30/12/2022 - 13:59

        Unforch

        • CowFrogHorse on 31/12/2022 - 21:07

          Thats the problem. People think the only way is to play the big rat race game.

          Guess what people living in the country all have homes and eat food and are doing significantly better than city people.

    • zonra on 30/12/2022 - 11:41

      Have you looked into renting a room? In outer suburbs?
      Do you need a whole house seeing that you’ve managed to live in a car for 3 months?
      Would that open up more options?

      • ToyotaCrownHybrid on 30/12/2022 - 14:01

        After renting multiple rooms over the years the car always ends up being the more comfortable option somehow.
        I don't need a whole house, but as I said I was looking at what I considered to be a pretty bloody expensive studio apartment. Just need Parking for the car, room for my desk and computer, bed, shower and kitchen

        • zonra on 30/12/2022 - 14:30
          +1

          I appreciate your honest response and without trying to be too critizing, your response more or less reflects the issue of most pro-cap commenters here.
          You choose not to rent a room.
          You choose to live closer to work (no doubt in a desirable area).

          Nothing wrong with your choice to live in the car rather than compromising. But to pin/blame this on others and demand their properties (in favourable locations with good amenities) saying that you’re entitled to these as “basic needs” are just poor form.
          Next there will be petitions for subsidised/capped-price Teslas because catching public transports is “beneath” most people.

          • ToyotaCrownHybrid on 30/12/2022 - 14:51

            @zonra: Yes, your first paragraph made sense.

            The second one, not so much, you're making assumptions, not even presumptions. I was just stating that demand is extremely high, opposed to previous years where it was extremely low, with more demand the cost increased. I never said I was entitled more than any other applicant to rent out a place or that IP Holders should be giving anyone a discount for no reason. The system works as intended, I just have high standards and willing to suffer in the short term so I can have a foreseeable enjoyable long term. I just didn't expect it to take this long or be this hard, at this rate, another 3 months I'll be buying that studio in the city.

            • zonra on 30/12/2022 - 15:16
              +2

              @ToyotaCrownHybrid:

              I never said I was entitled more than any other applicant to rent out a place or that IP Holders should be giving anyone a discount for no reason.

              On re-reading your and my own comments I appologize for lumping you up with others in this thread. You indeed merely stated that it was hard securing rentals and there was no blame-shifting in your responses.

              I dare say my point still applies to many others in this thread though.

              • ToyotaCrownHybrid on 30/12/2022 - 18:00
                +1

                @zonra: Undoubtedly, Landlords are just reacting to the market and interest rate rises etc in an expected manner. If I was in that position, I'd do exactly the same. Don't blame them at all haha. The shortage is lame but it's kinda fine for me anyway, instead of being a recluse locked up gaming all day, I'm hitting the gym, spending time at cafes and restaurants, going out a fair bit and occasionally just crashing at girls houses that I meet at bars. Shit I wouldn't have usually done if I did have secure housing or share housing and saving a tonne of $. Not the best, but not the worst either.

    • cobknob on 30/12/2022 - 17:17

      I've been in my car for 3 months; I go to inspections every day.

      Makes my situation even more fickled up lol.

      And unlike other idiots here with their own opinions and criticisms of the situation - with no experience or knowledge of the current market and its workings - and that your likely doing nothing wrong when applying. I wish good luck aye.

      • irony on 31/12/2022 - 08:13
        +2

        Sadly, capping rents won't help ToyotaCrownHybrid.
        If 40 people are turning up to the properties, 39 are missing out no matter what the price. TCH can apparently afford the $520pw.
        This is a supply vs demand issue, not a price issue.

    • Quantumcat on 31/12/2022 - 09:03

      With that much savings and decent income could you not afford to buy an apartment?

  • sheebies on 30/12/2022 - 10:07
    +1

    Something needs to be done. I’m not sure what that is but people can’t keep living the way they are.

    My sister’s rent has gone from, $350 to $410.. and come August next year I imagine it’s going to push to $500. (The house next door to me in the same area has recently been listed for $500 per week.) We live in a regional area, she moved here because she couldn’t afford to live in Melbourne anymore but realistically she’s not going to able to afford to live here either,

    $500 a week in rent for the area I live is absurd and I know that her landlord’s costs haven’t increased that drastically to the point that they need to be charging that. It’s pure greed. I’m all for the supply and demand system but not for freaking housing. People deserve to have a roof over their heads and some sense of security.

    • Extreme on 30/12/2022 - 11:43
      +3

      I’ll give you a landlords perspective:

      Property purchased 2009 for $252k.
      Current loan amount $232k.
      Interest only home loan. Was 2.39% fixed. Ended in September. ($462month interest)
      Current interest rate is 5.79%. $1119/month.

      Interest is up $657/month since September.

      Council rates, up $180/yr
      Water rates, down $11/yr
      Strata rates, up $1200/yr
      Insurance, up $100/yr

      Costs have increased ~$200/week on a property worth $600k with a loan under 40% of the property value.

      Rent is $400/week.

      So the money for the increased costs needs to come from somewhere. To suggest it’s unreasonable to pass on some of that to a tenant is absurd.

      • cobknob on 30/12/2022 - 17:27
        +1

        you've paid ~20k+interest in 13 years?! goes to hide in the bushes lol Loans be paid off in 30yrs… not 150yrs+

        • Extreme on 31/12/2022 - 13:55

          I guess you haven’t heard of an interest only loan. The IO period is usually capped at 5 years. But refinancing extends this.

          Paying interest only on an investment loan, allows me to use the profits to lower my personal/non deductible PPOR loan.

      • HannahBanna on 31/12/2022 - 10:28

        If you purchased a home in my area in 2009 for $150k they’re now worth over $500k. If you can’t afford to manage your investment property anymore then sell it. Even once you’ve paid off your loan, you’d still have a nice little profit.

        However based on that logic when interest rates went down rent should have gone down, it didn’t. In a lot of places it went up because of “supply and demand”

        • Extreme on 31/12/2022 - 15:06

          I can afford it. But you’re missing the point.

          The holding costs going up need to be paid.

          If I was to sell it to another investor, their costs are a lot higher.

          At the end of the day, selling it, does nothing to solve the rental crisis now does it?

          Housing costs are going up across the board. For home owners & tenants.

          Rents are dictated by what the market deems as reasonable, subject to supply & demand. The market doesn’t give a crap about a landlords costs.

        • Quantumcat on 01/01/2023 - 00:09
          +1

          However based on that logic when interest rates went down rent should have gone down, it didn’t. In a lot of places it went up because of “supply and demand”

          No, just because houses were cheaper to borrow for doesn't make there magically be more houses (usually an abundant supply means lower prices of something but not in this case, the lower cost to own is caused by the reserve bank). There are a limited number no matter what they cost to own. Lack of supply means high prices. But now with higher interest rates many investors are selling (so they're sitting on the market empty) or converting them to higher yield air bnbs, there are fewer available for tenants, so even less supply than usual.

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