Australia’s economy has all but ground to a halt since the coronavirus lockdown, leaving thousands across the country without an income.
A key fallout of the economic crisis was the sudden destabilisation of the living situations of many Australians meaning the majority of renters in Australia are finding it harder to pay the rent due to COVID-19, according to a survey conducted by rental property website Rent.com.au.
Almost two-thirds say they would like more support and information from Government, property managers and property owners.
- 59% of renters have either stopped working or had their working hours reduced
- 22% say their ability to pay rent has been severely affected
- 66% don’t feel confident seeking support from their property manager or landlord
- 35% of tenants have requested a rent reduction or deferral
- A large number of those tenants planning to move in the next 6 months have put their plans on hold
Rental affordability under stress
While 59% of renters indicated they are earning less as an impact of the pandemic, 33% have stopped working completely and 22% indicated that their ability to pay the rent has been severely affected.
Rent.com.au Chief Executive Officer, Greg Bader, said.
“We know the necessary shutdowns have been devastating for many businesses, particularly those in hospitality, tourism and retail.
These are also the sort of industries that that typically over-index with younger staff, the largest cohort of the renting community.
Even though state and federal governments moved relatively quickly to support tenants, there is still a level of confusion and uncertainty in the renting market in terms of process and responsibilities.
Over half of the respondents (53%) would like to see more support for renters from our leaders and just 21% believe the response so far has been enough.
As we start to emerge from the worst of the pandemic, we (as an industry and as a community) need to understand that renters, who make up 30% of us, will continue to deal with the financial impact for months or years to come.
Short-term protections such as a moratorium on evictions, or a deferral in rent, provide some comfort, but there are concerns that this is just kicking the can down the road.
We hope to see the industry and government respond in innovative ways to support renters and the industry-at-large.”
More communication from property managers and landlords needed
Two-thirds of renters said they don’t feel confident asking their property manager or landlord for help, and only 32% said their property manager or landlord was helpful and informative during the crisis.
“We would encourage property managers and owners to check in with their tenants, “ Mr Bader said.
Open and honest communication is the key and can only be an advantage for all parties as we prepare for the months ahead.
Not all renters are actually seeking financial assistance. In fact, only 35% have asked for a reduction or a deferral in their rent.
- Also read:This weekend’s auction clearance results Saturday May 28th – Markets steady despite post-election surge
- Also read:These are the most affordable suburbs within 10km of each CBD
- Also read:Beware of the unintended economic consequences ahead | Property Insiders [Video]
- Also read:Is there a looming schools shortage?
- Also read:Making an offer on a property – What price should you offer?
Of those, 50% have successfully negotiated (or are in the process of doing so), but unfortunately that means that half have been refused.
Obviously, every case is different, and the renter will generally be required to demonstrate any impact on their income/affordability.
Property managers and landlords are also affected by the crisis and all of us are navigating new ground.
So once again, open communication is important, with both parties needing to be empathic and understanding of each other’s situation.”
Moving plans left on hold
The survey also revealed that half of the respondents had planned to move in the next six months.
Of that group though, 46% have now put those plans on hold indefinitely, with another 30% indicating that their planned moves will be delayed.
“This is not surprising during a period of uncertainty.
With record levels of rental properties available right now and the possibility of downward pressure on rents, there is even more incentive for landlords and property managers to negotiate with their tenants, because finding a new one will be a little harder,” Mr Bader said.
We have seen some positive sentiment returning to the market in the last two weeks.
Activity is certainly up (traffic, Renter Resumes, property enquiries, for example) from where it was a month ago.
With talk of the shutdowns being wound back, 28% of renters surveyed indicated that they were now feeling optimistic about life post COVID-19.
That’s a good sign for us as a community, and we hope to see that grow over the next few months, as the economy re-opens and renters get a little more security. In the meantime, we encourage renters and property managers to stay connected.”
Now is the time to take action and set yourself for the opportunities that will present themselves as the market moves on
If you're wondering what will happen to property in 2020–2021 you are not alone.
You can trust the team at Metropole to provide you with direction, guidance and results.
In challenging times like we are currently experiencing you need an advisor who takes a holistic approach to your wealth creation and that's what you exactly what you get from the multi award winning team at Metropole.
If you're looking at buying your next home or investment property here's 4 ways we can help you:
- Strategic property advice. - Allow us to build a Strategic Property Plan for you and your family. Planning is bringing the future into the present so you can do something about it now! This will give you direction, results and more certainty. Click here to learn more
- Buyer's agency - As Australia's most trusted buyers’ agents we've been involved in over $3Billion worth of transactions creating wealth for our clients and we can do the same for you. Our on the ground teams in Melbourne, Sydney and Brisbane bring you years of experience and perspective - that's something money just can't buy. We'll help you find your next home or an investment grade property. Click here to learn how we can help you.
- Wealth Advisory - We can provide you with strategic tailored financial planning and wealth advice. Click here to learn more about we can help you.
- Property Management - Our stress free property management services help you maximise your property returns. Click here to find out why our clients enjoy a vacancy rate considerably below the market average, our tenants stay an average of 3 years and our properties lease 10 days faster than the market average.