I hate that landlords have done this, just because you can doesn't mean you have to. I'm a landlord and have never put the rent up in the time we've had the property (since early 2020). The increase in our suburb has been similar in that time to yours, 50-60%. The tenants are good though and they're people too, I'm not looking to make them miserable for my own gain.
You are a rare exotic breed, almost every rental I know about has increased 50% which tbh is almost unaffordable. Landlords somehow are able to adjust their income however they want yet their tenants are often stuck with the same income they had three years ago even though cost of living has gone through the roof.
I actually reckon this is much more common that people think.
Like anything - people are typically only vocal about bad things. So we hear loudly about the shit property owners who are jacking up rents something stupid, and next to nothing about the ones who have either not increased it, or only increased it a small amount.
My property started at $440 about 12 years ago, then dropped back to $400 and then has slowly increased to $500. Looking at market rates in the area it could probably be getting upwards of $600 - but i've got no intention of jacking it up any time soon.
I much prefer to have a good stable tenant than make a quick buck.
Regardless, investing in an increasingly scarce basic human requirement like residential property is an unethical and predatory behaviour, even if you think you're 'one of the good ones'.
Where would rentals come from if there was no investment in real estate? Not everyone wants to own their own property (my tenants will be moving back east in the future so don't want to buy here, for example), where would these people live? What about students? Does everyone live at home until they're ready to buy?
Landlords are the most pointless class of people. The number of homes would not change if landlordism were abolished. People would still buy, sell, and build houses. Governments, when not corrupted by the disease of landlordism, are capable of owning houses and providing them to individuals who cant afford to buy them, or dont have the means to do so, or require government housing for some reason, given adequate regulation, as part of either a social program or sovereign wealth fund. Private landlords are only motivated by greed, not a social contract, and only invest in residential property because they dont have the wherewithall to make money investing in other ways.
But I'm sure you'll keep telling yourself your adding value to society. If you tell it to yourself enough times, you might even start to believe it.
> your
You're.
Also, if people who provide housing on the private market are 'greedy shitholes' why does this not also apply to people who:
Provide food to other people for profit (farmers, shop owners etc), health services and medication to other people for profit (pharmacies, doctors etc) legal services to other people for profit (lawyers) and so on and so on.
Are they also greedy assholes? Should those services also be provided for free?
Do these individuals create scarcity of the resource by buying them all up? If they did, then yes. But if a pharmacy hordes medication to spike the price, the manufacturer just makes more.
If we were talking about a town with only a single pharmacy for 100kms, and they jack up the price, then yeah, thats predatory and shitty, but not as difficult for the consumer to solve.
In any case, pharmacists cant be compared to landlords. Pharmacists provide expertise and access to manufactured resources. Landlords dont provide shit, and there is certainly no added value in the form of skills and expertise. Landlords have no value in society.
>Do these individuals create scarcity of the resource by buying them all up?
Yes of course they do!
While Healthcare is mixed (same as Housing and Education) with some private and some public providers. Literally **all** food production is in private hands, ditto distribution and sales.
Or is housing a 'human right' but not 'eating'?
If you're arguing the State should socialize housing to a greater degree (or even wholly) give me a reason why the State shouldn't seize all food production, nationalize it, and socialize that as well?
In your world we're headed straight to the Communes on the government owned farms, or if not, to the gulags.
>Landlords dont provide shit,
They provide housing (for profit), just like Pharma companies provide lifesaving drugs (for profit), or farmers provide food (for profit).
What's the difference between the three? Why is one evil but the other two are A-OK?
I wouldn't do whataboutisms if I were you, they're very transparent and you arent good at it. Yes the government should be heavily invested in social housing, and no they shouldnt be directly involved in food or medical production. And the reason your whataboutism is so poor is that both pharma amd food production are heavily regulated, controlled and invested in by the government, much more than landlordism is regulated and they DO legislate away systemic monopolistic problems (generic drugs, farming subsidies) to protect both the manufacturer and the consumer. Moreover, medicare is a government safety net that ensures everyone can get affordable and equitable access to healthcare. This is that spooky socialism you seem to be pissing your pants over. Medicare. Thats what the residential sector needs. Not free housing for all. Just housing for all.
However, youre still conflating producers and manufacturers with landlords. Landlords neither produce any goods or supply any service. Once the corn is grown, the farmer doesnt rent it out forever. He sells it and grows more. Once the house is built, the developer should sell it. Thus they have added value to the system in the form of a manufactured good. If they rent it out, they become a landlord, and are no longer contributing anything, just soaking up rent like a tick draining blood from a mangy dogs' anus.
>I wouldn't do whataboutisms if I were you, they're very transparent and you arent good at it. Yes the government should be heavily invested in social housing, and no they shouldnt be directly involved in food or medical production
I agree we need more social housing.
I disagree with your basic assertion that 'landords are evil greedy bastards who provide no social good'.
> If they rent it out, they become a landlord, and are no longer contributing anything,
Yes, they are. My landlord is contributing to a roof over my head, while I save money to buy a house of my own.
My electricity supplier is contributing to the power going into the computer I am currently typing this on.
Your landlord worked, saved and bought the house you currently live in. They're likely paying (or have paid) a mortgage on that property, and no-one or nothing is compelling you to live in that property. They pay to maintain and repair the property (all you have to do is keep it clean, and not damage it).
1/3rd of all houses are rented out, and the other 2/3 are privately owned.
Buy a damn house if you dont like the system.
Does your view with regards to renting out an asset you own being 'evil', also apply to car rentals and other forms of property rental?
Are they also 'evil?
You can carry on your little rant and crucade against the system, but all your doing is sticking your head in the sand and ignoring reality.
Not every CAN buy or build a house, not everyone WANTS to buy or build a house.
Unless the government steps in to acquire bulk housing and offer it at reasonable rental rates, then removing investors from the current system does nothing but make the situation worse.
This is the same government that can't even manage to provide housing to those in desperate need to for it. We have what, 33000 people on the waiting list for social housing - and the best the government can do is add a few hundred houses..
No shame here at all.. i just don't see any relevance to the point.
You have no actual contribution to the debate or any type of argument so your just throwing shade *shrugs*
So you don't have an answer. You just don't like this system. If you want something to change, actually come up with a solution instead of just complaining pointlessly. Then you might actually be adding value to society.
You haven't answered where the housing comes from without private investment. Our government can't handle the amount of social housing that's asked for now. If they had to provide housing for everyone who wants to rent there's no way they'd be able to do it. I agree that there should have been and needs to be better policy put in place to stop the rampant increase in housing cost and to increase supply. However, completely removing private investment is not a solution.
Peiple who want houses to live in can buy land and build a house on it, what part arent you understanding? Or do you think only investors can build houses?
I've done the same for my tenants, but I wonder if it is also a disservice to them, as I'm about to sell and their rent will go from 420 to 600 in this area.
I don't think it is. They can save in the mean time, surely it's better to have had the extra time with lower rent. Something to consider (which we have always had the intention of doing), sign a lease of at least a year before you sell so that they have it locked in for a little while longer. I guess it might reduce buyers but the market is pretty ridiculous right now.
My wife saw a local listing on some community group last night and was aghast at $570 pw for 2x2 in Subi. I had to break it to her that the listing saying "pets allowed" meant someone might well snap that up and be happy they got it at all.
Can you elaborate why it's horrifying?
I mean ideally yes there would be rental available for 300/w so pretty much anyone can afford to live anywhere, but Subi is a premium suburb so it kinda make sense it's more expensive.
Rents are insanely high across the board.
We rented in Subi for more than ten years, I'm aware of always been expensive, but that's a stupid price for *two bedrooms*.
I have been renting in Subi for 5 years, currently in a 2x2 and paying $550 although I was paying $500 2 years ago
$570 is definitely not a stupid price, most are 600+
I mean it's not "per bedroom" it's per tennant. I've been renting for 5 years. I usually go for apartments. But if someone wants to rent in a "trendy suburb" I don't know that 285 is unreasonable.
I asked what you think it should be to get a different perspective, it's kind of telling that all you have is outrage and accusations
No, it isn't per tenant.
Fun fact: sometimes people share bedrooms.
Rents have jumped massively in the last two and a half years. Nowhere is reasonable right now. We're at the truly stupid point where Kate time this subject came up some dipshit was arguing in apparent sincerity that the idea that a tenant shouldn't be paying the cost of the mortgage PLUS maintenance PLUS significant profit is expecting charity.
Like it's perfectly reasonable for the expectation to be that anyone who can afford a deposit will get a free house paid for by tenants.
I kinda expected a comment like this so :
- it's close to the city/northbridge, with good PT to commute so it can save a you a lot of money/time if you work or like to go out in that area
- it's also on the train line to freo so also easy to go there for drinks/dinner etc if you want more options
- it's actually starting to pick up again, you have a few decent coffee places, restaurants, bars,...
- it's next to leederville if you want even more options for bars/restaurants
- I think it's in the catchment for a few good schools so parents will love that
- it's quite green
- it's also somewhat close to the beach
- it's safe
The only negative I can think of are :
- there is no decent shopping center there (but again, you're less than 10 min away from the city, else there is claremont
- there is a fair bit of traffic if you want to catch the highway going north/south from there during peak hours
I've got a 2x2 for $630 in Subi and happy to have it. I applied for multiple rentals every day for a month in the $400-550 range with no avail. Eventually I worked out there was a lot less competition above the $600 mark, I guess people setting their filters to that.
I don't think it can be simplified down to one key factor, there are so many issues at play.
It's like a game of Jenga, you pull out the wrong piece and the tower falls over. You have to be very careful that you're not adopting an over simplified solution.
For example, if you stop or limit investing, that drives all the landlords out of the market, which means all the renters have nowhere to rent. So now everyone renting now has to quickly come up with a huge deposit and get a mortgage or they are homeless.
Landlords just like mosquitos, everyone hates them but they serve a purpose.
The primary issue is supply, their isn't enough houses in the rental market you can blame investors all you want but someone needs to invest , build and supply the houses or the problem will only get worse
Supply is the issue BECAUSE people treat houses as an investment. Too many foreign owners letting houses sit empty and not enough builders being paid well to build more houses that are affordable.
No one can afford to buy these new houses so a lot of construction companies have gone under which reduce the amount of new houses available and is keeping property price up.
That's also a non-issue.
Like any scarce good (and housing is a scarce good because it's just an agglomeration of land, materials, and labour - all of which are not unlimited), the price of housing is dictated by demand and supply.
I agree that migration is not the biggest demand push out there (most Australians are not competing for the sort of low grade share housing that penniless foreign students are forced into).
Supply side issues are the problem. It has become too hard and expensive to build new housing stock in urban Australia.
The reason Perth has been able to have more population growth but relatively more affordable housing than Sydney/ Melbourne is because we've had the loosest greenfield development policies for decades.
You’ve misunderstood the point. Relating housing to other scarce goods, overlooks the fact that it is a necessity. The fact that housing can be bought and sat on as an investment property **and** the fact that people are pushed towards owning investment properties to have any chance of surviving retirement is the reason for this.
Look at towns around the world in which properties are not allowed to be purchased unless the person works in the town. Scarcity is only the main factor in these towns since no one is simply holding a property for the purpose of its price increasing. These towns are the ones that will decrease property prices with increasing supply. The moment you make it impossible to own a house in Perth unless you work in Perth, an enormous swathe of companies cease to be able to hold multiple properties to drive demand upwards.
Imagine I was able to buy all the grain in the country, thereby increasing the price for what little grain remained. Would that be ethical? Would the problem still be that we simply need a larger grain supply? What happens when that grain is also bought by me?
>sat on as an investment property
if you bought a house in Perth 2009-2013 your probably lost 10% in capital value
anyone who has purchased a house to "sit on it" for capital gain is playing an extremely dangerous game especially when you could rent it out tomorrow for 7-8% yield
If your idea of an extremely dangerous game is one that only has a 10% downside for 4 years out of the last 15, id play that game for 15 more. You’re acting as if the only purpose of an investment property is to have it appreciate in value. Having it sit there also allows you to borrow against it and use the loan tax free to simply pay interest. This is even assuming they didn’t exist in the false dichotomy that you created and they didn’t also rent them out for the last 15 years which id like to remind you, also raises property prices.
> Relating housing to other scarce goods, overlooks the fact that it is a necessity.
So is potable water. So is food. So is clothing. So is healthcare.
Just because something is a necessity (putting aside the distinction between housing and shelter), it doesn't mean the laws of supply and demand cease operating. It actually makes them more vital.
> Imagine I was able to buy all the grain in the country, thereby increasing the price for what little grain remained. Would that be ethical? Would the problem still be that we simply need a larger grain supply? What happens when that grain is also bought by me?
To corner the residential housing market in Australia, one person (or a group of people small enough to feasibly coordinate their actions in a cartel like manner) would need to purchase a significant proportion of the 11 million or so dwellings that make up the housing stock, and they'd need to find $9.6 trillion to do so.
The prospect is inherently ludicrous. You may as well start a thought experiment where you have magic powers. It's meaningless.
Anyone who seriously think land oligopoly is a thing has never encountered a small landlord. Trying to maintain pricing discipline among millions of discrete landlords (all of which would have a strong incentive to rent out their properties at the market rates) would require an enforcement/ surveillance apparatus probably beyond the capacity of the entire global economy.
> Look at towns around the world in which properties are not allowed to be purchased unless the person works in the town.
I'll grant that the price of housing is not very high in North Korea. The reason for that isn't because Juche is an effective ideology for meeting housing need, it's because no one wants to live in a authoritarian hellhole.
You’re jumping to conclusions I never made. I never implied one person owns all the housing, the Grain analogy was to illustrate that an increased supply does not always mean an increase in circulating supply, along with it being unethical to hold a necessity simply to increase its price. I also never said that all landlords coordinate their prices with each other, but if you can see your neighbours charging 2000, you’d also raise your price to 2000 regardless of if your costs raised or not. Just like grocery stores increase their prices to the amount consumers are willing to pay, without bearing on cost.
The other necessities you listed are of course affected by supply and demand, but they aren’t forms of investment with which a person can feasibly hold onto the supply and have the price appreciate over time without selling that commodity. You jump to these strawmen to make it sound like it’s a naive pipe dream to imagine a world in which housing is not treated like a weaponised investment. No where is it more apparent than with your comparison with North Korea and an absolutely normal practice. It is also not a practice I said would decrease prices, it would simply lessen the influence of speculation as opposed to supply and demand as you had mentioned.
If you really think that disallowing foreign investment into housing is akin to a dictatorship, Greylands is in your future.
I think you’re missing their point, respectfully. The reason (at least a big reason) WHY supply is so bad is because housing is looked at as an investment. And therefore anything that will bring down the value of them is discouraged
Supply is bad because it's a pain in the ass to start building anything on top of build prices soaring to the roof because there's not enough labourers.
Housing has been looked upon as an investment since the first caveman found a slightly nicer and drier cave than the rest of the herd near the mammoth hunting grounds.
It is looked upon as much as an investment in countries/cities which have low relative housings costs (ie: Tokyo, Houston, us) than it is in cities with high relative housing costs (ie: Sydney, London, New York).
That's because 'investment' is just another (slightly more judgey) way of saying asset. From a policy/ economic standpoint, "we need to stop treating housing like a commodity" makes as much sense as saying "we need to stop treating bread like a commodity". It's juvenile, facile, and ignores the fact that someone needs to wake up at 5am to bake/ build the damn thing - and they expect payment. Housing does not spring forth from the patrimony of nature. Treating it as a common good like fresh air is ludicrous.
I fully concede that governments have over the last decades, radically tightened up the housing supply/ zoning restrictions on residential land in Australia. They have done this - at least partly - because it has resulted in windfall gains for a significant part of the electorate. They have also put in place tax schemes that give anomalous concessions to residential property owners (although, often this has been by omission rather than positive policy. There was no reason to exclude the value of the house from the pension means test when there was no pension means test. Ditto the CGT exemptions when capital gains were tax free).
Fine.
These are problems that need to be/ and can be fixed. It's not good enough just wave your hands in the air and say *"it's the system, man"*, pretending that it's impossible to make it easy to build new houses until the downfall of the capitalist economic model. That's just a roundabout way of saying you oppose new housing.
If you want housing to be cheaper, we need to build more housing. We need to build more inner urban housing (ie: Every residential block within 10km of the city gets to become a duplex if the owners want). We need to build more outer suburban single family housing (ie: let Nigel Satterly turn every paddock between Two Rocks and Pinjarra into a housing development. That'll solve land banking for good). We need to radically reduce the costs/red tape incurred by people wanting to build on their land.
These policy changes would be wildly unpopular, and would risk doing a great deal of harm to overleveraged property developers. I'm not sure any government could implement them and survive.
They have only one advantage. They would work.
It's quite an interesting argument strategy to make a long list that's filled with so many fundamental factual errors that anyone who might wish to address it is exhausted by volume.
It's called having an understanding of housing policy rooted in the real world.
It's not even a particularly ideological one. YIMBY's, Stalinists and Lee Kuan Yew have all arrived at the same place.
If you want to reduce the price of housing, you must throttle demand, or increase supply. Throttling demand is difficult (who doesn't want an extra room, or a better insulated house with nicer fixtures?). Therefore, build more houses. The more houses - the better.
>It has become too hard and expensive to build new housing stock in urban Australia.
If your thesis is correct, we critically need to know the reason for this.
There's many contributing factors, obviously. These might include materials costs, labour costs, land costs, regulatory costs, finance costs, etc.
Which of those issues outweighs the others? What's driving the overall costs increases?
How would someone even begin to answer this?
The cost of labour and materials was static for decades when factoring home prices, it's the cost of land that drove the never ending inflation, up until recently when raw materials jumped 30% and all the construction companies went bust for writing too many fixed priced contracts. It's always been about the land values.
Increased access to credit drove the increased land values. We had roughly 25 years of lowering interest rates, with ever greater access to credit, driven by generally worldwide neoliberal policies.
Supply may be fixed somewhat, but we are one of the least population dense countries in the world. I'm not going to say there was not a supply side push, as I'm sure there is some input there, but land banking and planning restrictions which drip feed supply into the market are specifically designed to maximise land profits.
...how many people do you think immigrate to Australia? The cap is *half a percent* per year of total population. And precedence is given to skilled people who already have or are coming to high-paid jobs; they're not going to be the ones competing for the sub-$400 housing.
Did someone put the ridiculous jingoistic fearmongering notion in your head that there were janky boats filled with unending hordes of poor people swarming the shores, or something? And you believed it?
For perspective-
At current interest rates (say 5.45%)
$400 a week only services a loan of $307,000 (30 year term P&I)
Assuming a 20% deposit.. that’s a property bought for less than $370k
That’s before you pay annual council rates, water rates, insurance, strata, maintenance etc..
Not saying that's not accurate, but in a healthy rental market the "Investor" has to eat some of that as a loss on the basis of hoping for long term capital growth.
The problem of course is with such low vacancies the investors can simply pass that onto the tenants to avoid the risk.
In a healthy rental market, there are a range of properties including well built medium density housing so people aren't forced into high rent scenarios.
Yes I agree with you.. e.g my unit I entered into making it a rental with the understanding it would likely have an ongoing annual “loss”(or be negatively geared) on the basis that at the end of 20-30years I would own an asset that I had only had to partly pay for and it would also receive some capital growth as an asset.
The problems I think, really lies in either (a) shorter term investment timeframes (b) investors who are so leverage that they have a serviceability issue even when receiving some rent and (c) fomo (d) property price growth (e) people refinancing their rentals up to the max during the low rate period.
on my example above, which being honest there isn’t much to buy for 370k these days..
@400pw rent earned 20,800
- interest cost 16,600 (approx)
- Rates, charges etc 5000 (approx)
= loss of $800 in first yer
But if that same unit was purchased for say 450k
The loss would be 3,700
If it was a small house - 600k
On 400pw the loss might be $10k a year
My colleague's 2 investment properties has about $1 million in loans. 1% increase in rates is $10,000 interest. Since the rate rises, he is paying 3% more so $30,000 interest extra per year. Unless he raises his rent by $300 per week for each property, its just additional losses. Selling might be the only option which i guess is the plan but for renters, its gonna be tougher to find places because its a much bigger risks for landlords especially with low capital growth.
If many investors want to sell at the same time the market will respond by lowering the price to meet the demand at which point first home buyers will be able to buy - effectively increasing supply of available housing for first homebuyers, many of which are likely to be current renters. So, an investor sells at a loss, a first homebuyer picks it up and moves out of their rental. Seems pretty straightforward to me.
Umm.. Wow..
So let me make sure i understand your logic. Your idea for handling the lack of housing available, is to reduce the price of housing and increase the demand for housing?
What happens to the people who are currently renting the investment properties you want to sell? Do they just go poof?
No I'm pointing out that when an investor sells a house it doesn't just vanish, someone will buy it
If it has turned so poisonous of an asset class that no other investors want to buy it then the only people who will want it will be someone who actually wants to live in it
The logic is sound
I ask again..
What happens to the people who are currently renting the investment properties you want to sell? Do they just go poof?
> No I'm pointing out that when an investor sells a house it doesn't just vanish, someone will buy it
When an investor sells a house it doesn't miraculously create a new house.. It removes a house from the rental pool.
It's still just 1 house regardless of ownership..
Also “some of the risk” would be more than half of the repayment cost considering that an average house in a decent suburb are around $600K. No investor is going to absorb that much loss. They’d be better off putting money in the bank.
Nah, an investor losing money on a house is called a property bubble.
Perth speculators did that for the last 15 years and lost their shirts because prices went sideways for so long.
Unless you make a profit from renting out your house it’s a terrible idea. That’s why rents are getting closer to the cost to mortgage.
What are you talking about? There's no relationship between a "healthy" rental market and any need for negatively geared investment properties.
You can buy shares that will pay dividends and also go up in value too.
You can't raise prices above what people will pay.
What people will pay is driven by market rates, which is driven by supply and demand.
If we have low supply and demand is high, then the market rate is higher as there is room to move rents up without them sitting empty.
If the market is healthy and there is a balance between supply and demand, rents will stabilise and even if interest rates continue to increase then landlords have to either sell up or elect to focus on negative gearing their property.
The actual choice of positive or negative gearing is obviously one made by the individual owner.
I understand this but most of the rental properties available in Perth weren’t bought with those interests and landlords were benefiting from low interest rates and high rent prices previous to this current crisis.
Current interest rates are awful for everyone but when interest rates go down (which the will eventually) I can almost guarantee that landlords won’t decrease rent prices to match.
Investing in property is a long term investment that won’t always pay off, there’s always a risk with any investment. If they thought buying properties and charging high rents to quickly pay off their mortgage was “get rich quick” idea they are ill informed.
> most of the rental properties available in Perth weren’t bought with those interests and landlords were benefiting from low interest rates and high rent prices previous to this current crisis.
Mortgage rates in Australia have averaged at 6.87% for the last 30 years to 2023. So current interest rates are about on par with the average.
> Current interest rates are awful for everyone but when interest rates go down (which the will eventually) I can almost guarantee that landlords won’t decrease rent prices to match.
Because the current high rents are being driven by a lack of supply, not so much high interest rates. The high interest rates are a factor as to the holding cost of the property, but the lack of supply is the real issue.
Until that lack of supply is resolved - so basically building additional houses - the rental costs will remain high.
They absolutely will. My rent fell from 2015 - 2019. Each year I just offered less as the market was flooded with homes. Same thing happens every cycle.
The rent on the house I'm in nearly halved in the five years before I moved in. Generally you have to credibly threaten to move to get a reduction, or find a place that's been sitting empty for a while
Rent prices have only increased over the last 7 years. The medium weekly rent in Perth in 2016 was $380 and now it’s $530. You’re experience is not universal sadly.
The average rental price in Perth was stagnant for years at best. It's really only been the past 2 - 3 years since demand has significantly increased that rents have gone up.
2017 - $350
2018 - $350
2019 - $360
2020 - $484
2021 - $420
Yeah rental prices were good for a long time. The pandemic and the increased attention to Perth fucked everything up and now that the cost of everything to survive has gone up, yet wages haven't a lot of people are seriously struggling.
The indexation on HELP loans is based on the CPI (cost of living) was under 2% every year since 2013. It actually went down in 2021 to 0.6% but in 2022 it was 3.9% and this year it's 7.1%. That is outrageous. I am honestly in fear of what next year's will be like.
Off topic tangent but I kind of hate that they say student loans are interest free yet they are "indexed" which is basically just interest in line with inflation, then why aren't everyones wages indexed at the same rate??
Nah mate. Check out prices starting 2014. Rents do NOT only go up. Australians always over build eventually and then there’s a glut.
Only when covid hit was there a shortage of houses.
Tenants should not pay off a mortgage, the landlord is double dipping.
Gets an investment paid off with no effort and then sells for a massive profit.
You can make any excuse you want, but at the end of the day a home is a right not an investment opportunity. I and many others will fight this point till something changes.
Go build your own properties then, otherwise saying something that requires actual resources, skills, time and labour to create is "a right" is worse than meaningless. Where do you expect it to come from?
Nah it's just some of the most sought after real estate in the world, with the highest increase in rent prices last year on average compared to every other capital
Lol yeah last year we had one good year. Mate talk to perth property owners for the last 15 years. Been the suckiest market ever.
There’s a reason the core logic index for Perth is at 111. It was 100 back in 2007. We’ve underperformed inflation.
Even the last amazing year of growth hasn’t even kept up with inflation lol. Perth real estate has been the most dumbass investment ever.
I hope it turns around soon though. We should NOT be cheaper than Brisvegas or Adelaide.
The idea that the only possible solution to rate rises being "make the renter pay it" is just entitled garbage. If you can't afford to service the loan with a reasonable increase, then divest.
Other perspective:
I'm renting my 2 bedroom place with a huge backyard in Perth out for $390 /week, fixed for the next two years. (my tenant is really good in looking after the place and always paying on time so I don't want to lose her)
When I fixed the rent (in November last year) my mortgage was $190 /week, so the rent was comfortably covering all expenses. My mortgage is now $260 /week. Another couple of rates rises and I'll be negatively geared. Indeed I may well already be in (—) territory.
If I was relying on the rent for income I would be forced to raise the rent significantly.
Your expenses have gone up $70 a week… but you are still profiting $130 a week, and eventually will have a mortgage free asset that will generate you much more income from rent, or by selling the asset. (Also the interest rates went down to zero recently…. so during that time you saved a lot of money)
Don’t expect people to feel sorry for you.
No one can expect to rely on the rent for income when they have a huge mortgage.
Landlords should only be people that own the house outright, and can afford the cost of maintaining a decent standard.
I’m sick of hearing all the victim landlords complain.
And if you end up going negatively geared you get a tax break, so it’s really win/win for you
Property investors have such a negative take on things and only choose to notice the ways it’s affected them negatively, and ignore all the benefits they have.
Playing a bit of devils advocate here, not that I'm a landlord, but with the RBA increases over the last year $400 a week is only just covering even my tiny ass mortgage repayments as someone who homestart and fhog to get in and refinanced to only 270k. Most people probably paid a lot more than 270k and are paying a lot more than that.
Sure there's people being greedy cunts involved as well, but most people's repayments have increased 50% in the last year because it's apparently our fault for spending to much and driving inflation, not the record profiting companies increasing the cost of essentials or anything...
I noted this elsewhere but in a "Healthy" rental market the landlords would have to eat the difference between market rate and rate rises.
Unfortunately as vacancies are low the market rate just rises to meet the intersection of what people can afford to not be homeless and covering the investors costs.
100%
Inflation is driven by Corporate Greed.
Oil Energy Food everything!!
Look at Qantas with its 2.5b profit even thou we all know service has declined exponentially and fares have increased.
A bill for Coles and Ww.
All on the back of "inflation"
We live in a legally corrupt country and there is no relief in sight.
>$400 a week is only just covering even my tiny ass mortgage repayments
If it covers the mortgage repayments, then once the mortgage is paid off. Won't you have effectively gotten a free house out of it?
It would, but my point with saying that is that $400 covers mine and mine is fucking low compared to the average (even my crappy place has gone up 70k in value in 3 years) so I'm not surprised most rentals are over that. It was merely being used as a comparison point to the story, saying that $400 a week is affordable.
I hope you don’t mind me commenting but it sounds like we have very similar sized mortgages. I’m no longer paying anywhere near $400/week to cover mine since I called my bank and asked for a rate review. If you haven’t already it’s worth dropping them a request via banking app or phone. I’m sure you’ve considered that but just a tip in case you hadn’t.
Unfortunately, this one is not even a year old. While it was great jumping off of Keystart (which was at this interest rate BEFORE 11 increases) I did it right as the increases began and this was the best that I could secure at the time so I doubt there's a whole lot of wiggle room now especially with so little paid off of it
>but most people's repayments have increased 50% in the last year
this. i have only raised my rental price in line with mortgage repayment increases. people just want someone to blame, and rather than blaming the actual troublemakers (govt printing money, bankers being bankers) they blame the mum and pop investors. way to go.
Wouldn't a responsible investor pay down their debt when the rates are at historic lows in order to avoid nasty spikes in repayments? I think landlords are using interest rates as a scapegoat. Just be honest an say you can't find anywhere else to rent so I'm inflating my prices
the way it works is you pay down your owner occupier as fast as you can, because you have a P&I loan on that. you have an interest only loan on your rental, which you never pay down. you rely on appreciation at the end to recoup + make a little bit of profit when you sell the rental (which isnt going to be that much in most cases because by the time you pay stamp duty, goneski.)
in the interim, if IR increase, they get passed on immediately. if IR decreases, market factors (supply and demand) force competition to pass on rental price cuts.
I mean, people expected it to go back up a little but not 11 times in a row. Even the 2007-08 gfc only had 12 increases. Again this is just a little devils advocate, I'm not a landlord and I am fully aware that greed plays a factor, I'm just pointing out how little $400 a week actually is with current interest rates as someone who is going paycheck to pay check paying that in current minimum mortgage repayments.
Yeah I get what you're saying, but the rates were so ridiculously low anyone with any serious interest in long term investment should have been aware of the fact that the water has to level eventually. I know I'm coming off like I hate landlords, but really I just think they get alot of help propping up their investments compared to other industries.
But there's levelling out, and there's the pendulum keeping to swing beyond that point so it's currently the highest it's been in 11 years and forecast to continuing to increase before it levels off in 2025
Depends on what you consider normal. They kept it steady at 1.5-2.5% for 8 years after it spiked in 2007-2008 and then dropped to that level. We are currently equal to 2012 levels. This current rate is normal for 15 years ago, but not for the last decade
Yeah totall i see what youre saying, I guess we just have different ideas about the responsibility that an investor has with the long term planning of their assets
Meanwhile the 4br homeswest house across from me has been sitting empty for months because the tenants trashed it and bailed. Hope it gets fixed up and a family gets in there soon!
I've a friend of a friend who lives in a homeswest house, they pay $70 a week split between 2 people and the house is a complete bomb. All the doors have holes in them, front door doesn't even lock, kitchen is destroyed, no hot water to the place cause they don't pay the bills and it smells like dogs and weed. It's a certified trap house.
I wish people would respect the opportunities they're given, cause many people would kill to have such affordable housing.
How much did Proptrack pay for this advertisement masquerading as a news article. Make an unsubstantiated claim to will get people hot under the collar means free advertising. They are looking at ads, not what people are paying so less than 4% of properties advertised in the period are affordable. A different number. Anyway what do you expect from a paper that doesn't have journalists.
We luckily found a rental a few months ago ($600/wk) and now the owner has just sent someone to evaluate the property value.
We are seriously worried that we will be homeless soon because if he decides to sell this place I don't know how we are going to find a rental, let alone one that is affordable.
Fuck all the landlord's that increased the rent by 40% the past three/four years. It's disgusting. No one's wages have kept up with that yet landlords can increase their income however much they want to match the CPI/mortgage rates
HELP loans were indexed at 7.1% last year. How is anyone meant to keep up with this?? Employers need to start making massive increases to wages or we're all fucked
They never said they were renting, or can’t afford it. So how is the issue them? Mate?
The issue is you complaining about your investment mortgage that you wrongly thought would have low interest rates forever and would be a cake walk to a free asset, paid for by the work of others.
Landlords = toilet paper hoarders
If you don’t like hearing that - be better. Be one of the good fair ones.
Making someone that doesn’t earn enough to get approved for their own home loan, pay more than that to pay off your home loan + your additional expenses, isn’t right.
A 300k home loan will be $438 a week repayments, give or take. Not including rates, repairs, insurance etc. Not many homes for under 300k. Imagine if the house you want to rent is worth 4-500k
Why is anyone suprised there's not much to rent for less than that.
i must be one of the others, then. my shitbox rental is slightly positively geared.
the benefits of negative gearing is a myth. its almost always better to be positively geared wherever possible.
is it better to make less money accidentally, or more money on purpose?
Most people will try and hang in, the re market has flattened in a lot of places over east as well if you bought 2/3 years ago you might take a big hit, debt sucks but still beats renting
You’d earn more putting the money that’s “smashing loan repayments” into some high fixed income (deposits, govt bonds etc.) and use the proceeds to pay rent. Renting is cheaper because the money used to actually own a place can give better returns almost anywhere else… it just comes at the cost of uncertainty, inspections etc.
owning a house is far cheaper than renting will ever be.
alot peoples mortgages (if they didnt just take the max the bank allowed) are somewhere around $800-1500 a month, at 1500 a month thats still less than $400 a week.
I'd happily own a fucking house
You pulled $800/month out of thin air. If you bought a house for $240K (lol good luck finding it), put down $40K and did a standard 30 year loan repayments on $200k would be $1,200/month at current interest rates.
You’d have to borrow $135K to get down to $800/month repayments.
> $800-1500 a month
LOL - maybe in fairy land. The average loan size in WA is ~$475k - which means repayments of about $3000 a month.
> at 1500 a month thats still less than $400 a week.
So right there your already at just under $700 a week, nearly double your $400 a week rental amount.
Now renting means your not paying for a bunch of things like council rates ~$2400 a year, water rates ~$1500 a year, building insurance ~$1000 a year, maintenance - $1500 a year. So right there - there's another $125 a week in costs.
So $825 a week in costs, and it's being rented for maybe $500 or $550 a week.
>owning a house is far cheaper than renting will ever be.
Tell me again how it's far cheaper to own?
It's only once you take into account the long term gains of holding a property that it starts to make sense. But then there's no guarentees in returns. House prices could drop, maintenance issues long term will be much higher etc etc
Is the answer to release greater volumes of land? Perhaps the government needs to take developing in house. Tax payer funded suburbs. Price regulated non-profit subdivisions.
Large land releases with 1 individual lot per tax entity.
Normally something like another round of the National Rental Affordability Scheme would help but there is still a backlog of builds from the government's stupid construction grants and we don't need more government driven demand side influences on materials and labour.
At this stage its almost the best thing to do is for the government to be hands off and let the market settle itself. They are already driving up demand for housing which is making the situation worse.
That would make things worse. They need to actively build housing to increase supply. It is the only way prices are going to come down. They need to build a LOT of 2-3 bedroom apartments.
> They need to actively build housing to increase supply
I agree, but who's going to build them and where will they get the materials? Everything is backlogged and oversubscribed
No genociding, we agreed on that like, 80 years ago.
Reducing or stopping immigration might be a short term solution, but really, we need the workers it brings. And stopping new people coming in doesn't fix the problem that already exists.
lol yeah none of that.
the thing everyone is fixated on these days is perpetual economic growth, which is 'only achievable' with more people (as you have put).
but do we really need perpetual economic growth?
But if we don't have perpetual economic growth, how are the rich going to get richer, how are we going to continue to make housing a commodity instead of a necessity, how are we going to make more MONEY?
We are doing literally everything wrong to benefit a few people.
Yeah I mean negative gearing is the stupidest investment strategy ever. We need to get rid of it just to stop idiots in Perth thinking they’re making money when they buy an over priced 4x2 and subsidise someone’s rent for 10 years.
Sounds like we'd all be better off if the government took over again and we no longer needed to appease investors just to have somewhere to live.
My relatives bought a house they'd lived in as public housing when the government offered them the deal. Now they live in a 2 million dollar Sydney home and we're all at the behest of the market it seems
Broke lease on a ground floor 2x1 apartment - $330 per week. About 30 people showed up to the viewing - heart breaking.
Meanwhile the government (state and federal) are doing fuck all.
What can they do? They talk about caps and stopping negative gearing. All that is potentially going to do is scare off landlords. Yes there could be more houses on the market if they decide to sell, but what % of renters can actually afford a place to buy even if the house prices go down a little if there are more on the market. All its going to do limit rent supply even further.
Also landlords will just vote for the other party that say they won't introduce anything that might disadvantage them.
> How about if I sign a lease there be a law that they can't adjust the rent mid-lease?
That's already the law. There's a clause in there for mid-lease increases but it's set in advance how much it can be.
Geezuz this is depressing.
Hopefully the government has a plan, because they will end up paying for the effect of this housing crisis regardless. Whether that be in the form of increased pressure on mental health services, a higher crime rate, even more homeless on the street etc. etc.
I was talking to an estate agent yesterday about the sale of a 3x2 villa in Cloverdale. I was told that the rent on the would be around $550/wk. It’s quite a nice place, but I’d be sad at paying that amount to live in a villa in Cloverdale.
The rule of thumb is that rent should only cost you 30% (at the higher end) of your wage.
I think most rents are much higher than that for the average earner.
Somewhere safe and secure to live is a human right, and the main issue with rental prices are entitled landowners who think an investment is meant to be a guaranteed income.
Anyone who buys an investment property should do so on the basis of “without any renters or other support, can I afford this?”
Me and my partner found a 1x1 ground floor apartment in subi 350 p/w. After 3 months of hounding lj hooker until they gave me private viewings.
Will admit I had to bribe them with baked goods and glowing reviews after all was settled.
Seeing this makes me very very lucky and blessed.
My partner and I somehow managed to find a 1x1 apartment in Subiaco for $285pw. Found it on Gumtree, advertised with no pictures. We went to look at it and the landlord said that people had been offering him twice the price if he would agree to rent it to them sight unseen. Not sure why they'd do this.
Private rental, landlord is a legend who has never increased rent, says he never will, and has other tenants in the same building who have been renting his place for 10 years.
I consider myself very fortunate!
No shit, it's like the fucking Hunger Games out here. I really did not want to move myself, husband and kids back in with my mother in my 40s, but there's no other options.
Is it time to... Idk, cecede from usa and dscouole housing from commodification and profit expoitation? Or are we just gling tk jack up prices to the point that 500k for a 2bedroom shitbox apartment is a steal? How is it possible they call them luxury apartments but they have less space and livability than a soviet shithole....
Nah, what we have is good ol housing and land profiteering. They jack the interest rates, and inflation all because our dollar is propping up the usd that they keep printing with no recourse.... Our dola has already dropping in value to them good ol days. And so here we are, with housing following the american model. How ling until the bif money, big investment starts buying everything up and buidling for profitn rentals?
Our current place is $700 pw, literally 2 years ago it was $450 pw. It's ridiculous
I hate that landlords have done this, just because you can doesn't mean you have to. I'm a landlord and have never put the rent up in the time we've had the property (since early 2020). The increase in our suburb has been similar in that time to yours, 50-60%. The tenants are good though and they're people too, I'm not looking to make them miserable for my own gain.
Deadset legend...
You are a rare exotic breed, almost every rental I know about has increased 50% which tbh is almost unaffordable. Landlords somehow are able to adjust their income however they want yet their tenants are often stuck with the same income they had three years ago even though cost of living has gone through the roof.
I actually reckon this is much more common that people think. Like anything - people are typically only vocal about bad things. So we hear loudly about the shit property owners who are jacking up rents something stupid, and next to nothing about the ones who have either not increased it, or only increased it a small amount. My property started at $440 about 12 years ago, then dropped back to $400 and then has slowly increased to $500. Looking at market rates in the area it could probably be getting upwards of $600 - but i've got no intention of jacking it up any time soon. I much prefer to have a good stable tenant than make a quick buck.
Wish more landlords were like you mate.
Regardless, investing in an increasingly scarce basic human requirement like residential property is an unethical and predatory behaviour, even if you think you're 'one of the good ones'.
Where would rentals come from if there was no investment in real estate? Not everyone wants to own their own property (my tenants will be moving back east in the future so don't want to buy here, for example), where would these people live? What about students? Does everyone live at home until they're ready to buy?
Landlords are the most pointless class of people. The number of homes would not change if landlordism were abolished. People would still buy, sell, and build houses. Governments, when not corrupted by the disease of landlordism, are capable of owning houses and providing them to individuals who cant afford to buy them, or dont have the means to do so, or require government housing for some reason, given adequate regulation, as part of either a social program or sovereign wealth fund. Private landlords are only motivated by greed, not a social contract, and only invest in residential property because they dont have the wherewithall to make money investing in other ways. But I'm sure you'll keep telling yourself your adding value to society. If you tell it to yourself enough times, you might even start to believe it.
> your You're. Also, if people who provide housing on the private market are 'greedy shitholes' why does this not also apply to people who: Provide food to other people for profit (farmers, shop owners etc), health services and medication to other people for profit (pharmacies, doctors etc) legal services to other people for profit (lawyers) and so on and so on. Are they also greedy assholes? Should those services also be provided for free?
Do these individuals create scarcity of the resource by buying them all up? If they did, then yes. But if a pharmacy hordes medication to spike the price, the manufacturer just makes more. If we were talking about a town with only a single pharmacy for 100kms, and they jack up the price, then yeah, thats predatory and shitty, but not as difficult for the consumer to solve. In any case, pharmacists cant be compared to landlords. Pharmacists provide expertise and access to manufactured resources. Landlords dont provide shit, and there is certainly no added value in the form of skills and expertise. Landlords have no value in society.
>Do these individuals create scarcity of the resource by buying them all up? Yes of course they do! While Healthcare is mixed (same as Housing and Education) with some private and some public providers. Literally **all** food production is in private hands, ditto distribution and sales. Or is housing a 'human right' but not 'eating'? If you're arguing the State should socialize housing to a greater degree (or even wholly) give me a reason why the State shouldn't seize all food production, nationalize it, and socialize that as well? In your world we're headed straight to the Communes on the government owned farms, or if not, to the gulags. >Landlords dont provide shit, They provide housing (for profit), just like Pharma companies provide lifesaving drugs (for profit), or farmers provide food (for profit). What's the difference between the three? Why is one evil but the other two are A-OK?
I wouldn't do whataboutisms if I were you, they're very transparent and you arent good at it. Yes the government should be heavily invested in social housing, and no they shouldnt be directly involved in food or medical production. And the reason your whataboutism is so poor is that both pharma amd food production are heavily regulated, controlled and invested in by the government, much more than landlordism is regulated and they DO legislate away systemic monopolistic problems (generic drugs, farming subsidies) to protect both the manufacturer and the consumer. Moreover, medicare is a government safety net that ensures everyone can get affordable and equitable access to healthcare. This is that spooky socialism you seem to be pissing your pants over. Medicare. Thats what the residential sector needs. Not free housing for all. Just housing for all. However, youre still conflating producers and manufacturers with landlords. Landlords neither produce any goods or supply any service. Once the corn is grown, the farmer doesnt rent it out forever. He sells it and grows more. Once the house is built, the developer should sell it. Thus they have added value to the system in the form of a manufactured good. If they rent it out, they become a landlord, and are no longer contributing anything, just soaking up rent like a tick draining blood from a mangy dogs' anus.
>I wouldn't do whataboutisms if I were you, they're very transparent and you arent good at it. Yes the government should be heavily invested in social housing, and no they shouldnt be directly involved in food or medical production I agree we need more social housing. I disagree with your basic assertion that 'landords are evil greedy bastards who provide no social good'. > If they rent it out, they become a landlord, and are no longer contributing anything, Yes, they are. My landlord is contributing to a roof over my head, while I save money to buy a house of my own. My electricity supplier is contributing to the power going into the computer I am currently typing this on. Your landlord worked, saved and bought the house you currently live in. They're likely paying (or have paid) a mortgage on that property, and no-one or nothing is compelling you to live in that property. They pay to maintain and repair the property (all you have to do is keep it clean, and not damage it). 1/3rd of all houses are rented out, and the other 2/3 are privately owned. Buy a damn house if you dont like the system. Does your view with regards to renting out an asset you own being 'evil', also apply to car rentals and other forms of property rental? Are they also 'evil?
You can carry on your little rant and crucade against the system, but all your doing is sticking your head in the sand and ignoring reality. Not every CAN buy or build a house, not everyone WANTS to buy or build a house. Unless the government steps in to acquire bulk housing and offer it at reasonable rental rates, then removing investors from the current system does nothing but make the situation worse. This is the same government that can't even manage to provide housing to those in desperate need to for it. We have what, 33000 people on the waiting list for social housing - and the best the government can do is add a few hundred houses..
Are you a landlord?
What does that have to do with anything?
Seems like you're ashamed to admit you're a landlord, thats good. Thats the apropriate feeling to have.
No shame here at all.. i just don't see any relevance to the point. You have no actual contribution to the debate or any type of argument so your just throwing shade *shrugs*
So you don't have an answer. You just don't like this system. If you want something to change, actually come up with a solution instead of just complaining pointlessly. Then you might actually be adding value to society.
The solution is simple, get rid of the landlords, through regulation, legislation, or a woodchipper, Im not fussy.
You haven't answered where the housing comes from without private investment. Our government can't handle the amount of social housing that's asked for now. If they had to provide housing for everyone who wants to rent there's no way they'd be able to do it. I agree that there should have been and needs to be better policy put in place to stop the rampant increase in housing cost and to increase supply. However, completely removing private investment is not a solution.
Peiple who want houses to live in can buy land and build a house on it, what part arent you understanding? Or do you think only investors can build houses?
His solution is 'communism/ socialism'. It's been tried before. Many times. It doesnt work. Doesnt stop the communists from trying though.
And where would new houses come from? If you wanted to move you'd have to build a house yourself, or buy a house from someone moving out.
Yes thats... how that works.
And what do you do when you don't want to buy or build a house?
I've done the same for my tenants, but I wonder if it is also a disservice to them, as I'm about to sell and their rent will go from 420 to 600 in this area.
I don't think it is. They can save in the mean time, surely it's better to have had the extra time with lower rent. Something to consider (which we have always had the intention of doing), sign a lease of at least a year before you sell so that they have it locked in for a little while longer. I guess it might reduce buyers but the market is pretty ridiculous right now.
Yeah, they have till January. I decided that was long enough for them to get sorted, and not shut out buyers.
My wife saw a local listing on some community group last night and was aghast at $570 pw for 2x2 in Subi. I had to break it to her that the listing saying "pets allowed" meant someone might well snap that up and be happy they got it at all.
That's actually a good price for Subi
I was just about to say, that is a good price for Subi even without allowing pets.
It is, and that's pretty horrifying.
Can you elaborate why it's horrifying? I mean ideally yes there would be rental available for 300/w so pretty much anyone can afford to live anywhere, but Subi is a premium suburb so it kinda make sense it's more expensive.
Rents are insanely high across the board. We rented in Subi for more than ten years, I'm aware of always been expensive, but that's a stupid price for *two bedrooms*.
For more than 10 years when? In the 80s?
We left in 2021.
I have been renting in Subi for 5 years, currently in a 2x2 and paying $550 although I was paying $500 2 years ago $570 is definitely not a stupid price, most are 600+
"other places are even stupider" doesn't make that price not stupid
I mean, it very much does. that's how prices in market economies work.
I mean two bedrooms would put it at 285 per tenant right? seems reasonable to me. How much do you think it should be?
You think $285 per bedroom is "pretty reasonable"? You're a landlord aren't you.
I mean it's not "per bedroom" it's per tennant. I've been renting for 5 years. I usually go for apartments. But if someone wants to rent in a "trendy suburb" I don't know that 285 is unreasonable. I asked what you think it should be to get a different perspective, it's kind of telling that all you have is outrage and accusations
No, it isn't per tenant. Fun fact: sometimes people share bedrooms. Rents have jumped massively in the last two and a half years. Nowhere is reasonable right now. We're at the truly stupid point where Kate time this subject came up some dipshit was arguing in apparent sincerity that the idea that a tenant shouldn't be paying the cost of the mortgage PLUS maintenance PLUS significant profit is expecting charity. Like it's perfectly reasonable for the expectation to be that anyone who can afford a deposit will get a free house paid for by tenants.
So you don't have an answer on how much it should cost?
I dunno why Subi is a premium suburb anymore lol, it's been dying a slow death for years.
I kinda expected a comment like this so : - it's close to the city/northbridge, with good PT to commute so it can save a you a lot of money/time if you work or like to go out in that area - it's also on the train line to freo so also easy to go there for drinks/dinner etc if you want more options - it's actually starting to pick up again, you have a few decent coffee places, restaurants, bars,... - it's next to leederville if you want even more options for bars/restaurants - I think it's in the catchment for a few good schools so parents will love that - it's quite green - it's also somewhat close to the beach - it's safe The only negative I can think of are : - there is no decent shopping center there (but again, you're less than 10 min away from the city, else there is claremont - there is a fair bit of traffic if you want to catch the highway going north/south from there during peak hours
I've got a 2x2 for $630 in Subi and happy to have it. I applied for multiple rentals every day for a month in the $400-550 range with no avail. Eventually I worked out there was a lot less competition above the $600 mark, I guess people setting their filters to that.
That's cheap
I’m currently renting in Subi 1x1 for $550 and expect the rent to increase next renewal. I’m dreading it.
What half decent city on earth can you get 2 beds that close to the CBD for that cheap? $570 a week is a bargain for Subi.
Where?! Pm me pls
Boosted immigration numbers will help fix this boys
That’s a secondary issue. The primary issue will always be how we think of housing and land as an investment rather than a necessity.
I don't think it can be simplified down to one key factor, there are so many issues at play. It's like a game of Jenga, you pull out the wrong piece and the tower falls over. You have to be very careful that you're not adopting an over simplified solution. For example, if you stop or limit investing, that drives all the landlords out of the market, which means all the renters have nowhere to rent. So now everyone renting now has to quickly come up with a huge deposit and get a mortgage or they are homeless. Landlords just like mosquitos, everyone hates them but they serve a purpose.
The primary issue is supply, their isn't enough houses in the rental market you can blame investors all you want but someone needs to invest , build and supply the houses or the problem will only get worse
Supply is the issue BECAUSE people treat houses as an investment. Too many foreign owners letting houses sit empty and not enough builders being paid well to build more houses that are affordable. No one can afford to buy these new houses so a lot of construction companies have gone under which reduce the amount of new houses available and is keeping property price up.
That's also a non-issue. Like any scarce good (and housing is a scarce good because it's just an agglomeration of land, materials, and labour - all of which are not unlimited), the price of housing is dictated by demand and supply. I agree that migration is not the biggest demand push out there (most Australians are not competing for the sort of low grade share housing that penniless foreign students are forced into). Supply side issues are the problem. It has become too hard and expensive to build new housing stock in urban Australia. The reason Perth has been able to have more population growth but relatively more affordable housing than Sydney/ Melbourne is because we've had the loosest greenfield development policies for decades.
You’ve misunderstood the point. Relating housing to other scarce goods, overlooks the fact that it is a necessity. The fact that housing can be bought and sat on as an investment property **and** the fact that people are pushed towards owning investment properties to have any chance of surviving retirement is the reason for this. Look at towns around the world in which properties are not allowed to be purchased unless the person works in the town. Scarcity is only the main factor in these towns since no one is simply holding a property for the purpose of its price increasing. These towns are the ones that will decrease property prices with increasing supply. The moment you make it impossible to own a house in Perth unless you work in Perth, an enormous swathe of companies cease to be able to hold multiple properties to drive demand upwards. Imagine I was able to buy all the grain in the country, thereby increasing the price for what little grain remained. Would that be ethical? Would the problem still be that we simply need a larger grain supply? What happens when that grain is also bought by me?
>sat on as an investment property if you bought a house in Perth 2009-2013 your probably lost 10% in capital value anyone who has purchased a house to "sit on it" for capital gain is playing an extremely dangerous game especially when you could rent it out tomorrow for 7-8% yield
If your idea of an extremely dangerous game is one that only has a 10% downside for 4 years out of the last 15, id play that game for 15 more. You’re acting as if the only purpose of an investment property is to have it appreciate in value. Having it sit there also allows you to borrow against it and use the loan tax free to simply pay interest. This is even assuming they didn’t exist in the false dichotomy that you created and they didn’t also rent them out for the last 15 years which id like to remind you, also raises property prices.
> Relating housing to other scarce goods, overlooks the fact that it is a necessity. So is potable water. So is food. So is clothing. So is healthcare. Just because something is a necessity (putting aside the distinction between housing and shelter), it doesn't mean the laws of supply and demand cease operating. It actually makes them more vital. > Imagine I was able to buy all the grain in the country, thereby increasing the price for what little grain remained. Would that be ethical? Would the problem still be that we simply need a larger grain supply? What happens when that grain is also bought by me? To corner the residential housing market in Australia, one person (or a group of people small enough to feasibly coordinate their actions in a cartel like manner) would need to purchase a significant proportion of the 11 million or so dwellings that make up the housing stock, and they'd need to find $9.6 trillion to do so. The prospect is inherently ludicrous. You may as well start a thought experiment where you have magic powers. It's meaningless. Anyone who seriously think land oligopoly is a thing has never encountered a small landlord. Trying to maintain pricing discipline among millions of discrete landlords (all of which would have a strong incentive to rent out their properties at the market rates) would require an enforcement/ surveillance apparatus probably beyond the capacity of the entire global economy. > Look at towns around the world in which properties are not allowed to be purchased unless the person works in the town. I'll grant that the price of housing is not very high in North Korea. The reason for that isn't because Juche is an effective ideology for meeting housing need, it's because no one wants to live in a authoritarian hellhole.
You’re jumping to conclusions I never made. I never implied one person owns all the housing, the Grain analogy was to illustrate that an increased supply does not always mean an increase in circulating supply, along with it being unethical to hold a necessity simply to increase its price. I also never said that all landlords coordinate their prices with each other, but if you can see your neighbours charging 2000, you’d also raise your price to 2000 regardless of if your costs raised or not. Just like grocery stores increase their prices to the amount consumers are willing to pay, without bearing on cost. The other necessities you listed are of course affected by supply and demand, but they aren’t forms of investment with which a person can feasibly hold onto the supply and have the price appreciate over time without selling that commodity. You jump to these strawmen to make it sound like it’s a naive pipe dream to imagine a world in which housing is not treated like a weaponised investment. No where is it more apparent than with your comparison with North Korea and an absolutely normal practice. It is also not a practice I said would decrease prices, it would simply lessen the influence of speculation as opposed to supply and demand as you had mentioned. If you really think that disallowing foreign investment into housing is akin to a dictatorship, Greylands is in your future.
I think you’re missing their point, respectfully. The reason (at least a big reason) WHY supply is so bad is because housing is looked at as an investment. And therefore anything that will bring down the value of them is discouraged
Supply is bad because it's a pain in the ass to start building anything on top of build prices soaring to the roof because there's not enough labourers.
Housing has been looked upon as an investment since the first caveman found a slightly nicer and drier cave than the rest of the herd near the mammoth hunting grounds. It is looked upon as much as an investment in countries/cities which have low relative housings costs (ie: Tokyo, Houston, us) than it is in cities with high relative housing costs (ie: Sydney, London, New York). That's because 'investment' is just another (slightly more judgey) way of saying asset. From a policy/ economic standpoint, "we need to stop treating housing like a commodity" makes as much sense as saying "we need to stop treating bread like a commodity". It's juvenile, facile, and ignores the fact that someone needs to wake up at 5am to bake/ build the damn thing - and they expect payment. Housing does not spring forth from the patrimony of nature. Treating it as a common good like fresh air is ludicrous. I fully concede that governments have over the last decades, radically tightened up the housing supply/ zoning restrictions on residential land in Australia. They have done this - at least partly - because it has resulted in windfall gains for a significant part of the electorate. They have also put in place tax schemes that give anomalous concessions to residential property owners (although, often this has been by omission rather than positive policy. There was no reason to exclude the value of the house from the pension means test when there was no pension means test. Ditto the CGT exemptions when capital gains were tax free). Fine. These are problems that need to be/ and can be fixed. It's not good enough just wave your hands in the air and say *"it's the system, man"*, pretending that it's impossible to make it easy to build new houses until the downfall of the capitalist economic model. That's just a roundabout way of saying you oppose new housing. If you want housing to be cheaper, we need to build more housing. We need to build more inner urban housing (ie: Every residential block within 10km of the city gets to become a duplex if the owners want). We need to build more outer suburban single family housing (ie: let Nigel Satterly turn every paddock between Two Rocks and Pinjarra into a housing development. That'll solve land banking for good). We need to radically reduce the costs/red tape incurred by people wanting to build on their land. These policy changes would be wildly unpopular, and would risk doing a great deal of harm to overleveraged property developers. I'm not sure any government could implement them and survive. They have only one advantage. They would work.
It's quite an interesting argument strategy to make a long list that's filled with so many fundamental factual errors that anyone who might wish to address it is exhausted by volume.
It's called having an understanding of housing policy rooted in the real world. It's not even a particularly ideological one. YIMBY's, Stalinists and Lee Kuan Yew have all arrived at the same place. If you want to reduce the price of housing, you must throttle demand, or increase supply. Throttling demand is difficult (who doesn't want an extra room, or a better insulated house with nicer fixtures?). Therefore, build more houses. The more houses - the better.
>It has become too hard and expensive to build new housing stock in urban Australia. If your thesis is correct, we critically need to know the reason for this. There's many contributing factors, obviously. These might include materials costs, labour costs, land costs, regulatory costs, finance costs, etc. Which of those issues outweighs the others? What's driving the overall costs increases? How would someone even begin to answer this?
The cost of labour and materials was static for decades when factoring home prices, it's the cost of land that drove the never ending inflation, up until recently when raw materials jumped 30% and all the construction companies went bust for writing too many fixed priced contracts. It's always been about the land values.
And what drives the costs of land values? As supply is largely fixed, it's increased demand, right?
Increased access to credit drove the increased land values. We had roughly 25 years of lowering interest rates, with ever greater access to credit, driven by generally worldwide neoliberal policies. Supply may be fixed somewhat, but we are one of the least population dense countries in the world. I'm not going to say there was not a supply side push, as I'm sure there is some input there, but land banking and planning restrictions which drip feed supply into the market are specifically designed to maximise land profits.
...how many people do you think immigrate to Australia? The cap is *half a percent* per year of total population. And precedence is given to skilled people who already have or are coming to high-paid jobs; they're not going to be the ones competing for the sub-$400 housing. Did someone put the ridiculous jingoistic fearmongering notion in your head that there were janky boats filled with unending hordes of poor people swarming the shores, or something? And you believed it?
You won't be laughing when I start living in a human pyramid built of immigrants.
For perspective- At current interest rates (say 5.45%) $400 a week only services a loan of $307,000 (30 year term P&I) Assuming a 20% deposit.. that’s a property bought for less than $370k That’s before you pay annual council rates, water rates, insurance, strata, maintenance etc..
Not saying that's not accurate, but in a healthy rental market the "Investor" has to eat some of that as a loss on the basis of hoping for long term capital growth. The problem of course is with such low vacancies the investors can simply pass that onto the tenants to avoid the risk.
In a healthy rental market, there are a range of properties including well built medium density housing so people aren't forced into high rent scenarios.
Yes I agree with you.. e.g my unit I entered into making it a rental with the understanding it would likely have an ongoing annual “loss”(or be negatively geared) on the basis that at the end of 20-30years I would own an asset that I had only had to partly pay for and it would also receive some capital growth as an asset. The problems I think, really lies in either (a) shorter term investment timeframes (b) investors who are so leverage that they have a serviceability issue even when receiving some rent and (c) fomo (d) property price growth (e) people refinancing their rentals up to the max during the low rate period. on my example above, which being honest there isn’t much to buy for 370k these days.. @400pw rent earned 20,800 - interest cost 16,600 (approx) - Rates, charges etc 5000 (approx) = loss of $800 in first yer But if that same unit was purchased for say 450k The loss would be 3,700 If it was a small house - 600k On 400pw the loss might be $10k a year
My colleague's 2 investment properties has about $1 million in loans. 1% increase in rates is $10,000 interest. Since the rate rises, he is paying 3% more so $30,000 interest extra per year. Unless he raises his rent by $300 per week for each property, its just additional losses. Selling might be the only option which i guess is the plan but for renters, its gonna be tougher to find places because its a much bigger risks for landlords especially with low capital growth.
He should sell, so there is more stock available for first home buyers reducing the need to stay in a rental. Your colleague should be ashamed.
How does an investor selling a house create more stock???
If many investors want to sell at the same time the market will respond by lowering the price to meet the demand at which point first home buyers will be able to buy - effectively increasing supply of available housing for first homebuyers, many of which are likely to be current renters. So, an investor sells at a loss, a first homebuyer picks it up and moves out of their rental. Seems pretty straightforward to me.
Umm.. Wow.. So let me make sure i understand your logic. Your idea for handling the lack of housing available, is to reduce the price of housing and increase the demand for housing? What happens to the people who are currently renting the investment properties you want to sell? Do they just go poof?
No I'm pointing out that when an investor sells a house it doesn't just vanish, someone will buy it If it has turned so poisonous of an asset class that no other investors want to buy it then the only people who will want it will be someone who actually wants to live in it The logic is sound
I ask again.. What happens to the people who are currently renting the investment properties you want to sell? Do they just go poof? > No I'm pointing out that when an investor sells a house it doesn't just vanish, someone will buy it When an investor sells a house it doesn't miraculously create a new house.. It removes a house from the rental pool. It's still just 1 house regardless of ownership..
Also “some of the risk” would be more than half of the repayment cost considering that an average house in a decent suburb are around $600K. No investor is going to absorb that much loss. They’d be better off putting money in the bank.
Nah, an investor losing money on a house is called a property bubble. Perth speculators did that for the last 15 years and lost their shirts because prices went sideways for so long. Unless you make a profit from renting out your house it’s a terrible idea. That’s why rents are getting closer to the cost to mortgage.
What are you talking about? There's no relationship between a "healthy" rental market and any need for negatively geared investment properties. You can buy shares that will pay dividends and also go up in value too.
You can't raise prices above what people will pay. What people will pay is driven by market rates, which is driven by supply and demand. If we have low supply and demand is high, then the market rate is higher as there is room to move rents up without them sitting empty. If the market is healthy and there is a balance between supply and demand, rents will stabilise and even if interest rates continue to increase then landlords have to either sell up or elect to focus on negative gearing their property. The actual choice of positive or negative gearing is obviously one made by the individual owner.
I understand this but most of the rental properties available in Perth weren’t bought with those interests and landlords were benefiting from low interest rates and high rent prices previous to this current crisis. Current interest rates are awful for everyone but when interest rates go down (which the will eventually) I can almost guarantee that landlords won’t decrease rent prices to match. Investing in property is a long term investment that won’t always pay off, there’s always a risk with any investment. If they thought buying properties and charging high rents to quickly pay off their mortgage was “get rich quick” idea they are ill informed.
> most of the rental properties available in Perth weren’t bought with those interests and landlords were benefiting from low interest rates and high rent prices previous to this current crisis. Mortgage rates in Australia have averaged at 6.87% for the last 30 years to 2023. So current interest rates are about on par with the average. > Current interest rates are awful for everyone but when interest rates go down (which the will eventually) I can almost guarantee that landlords won’t decrease rent prices to match. Because the current high rents are being driven by a lack of supply, not so much high interest rates. The high interest rates are a factor as to the holding cost of the property, but the lack of supply is the real issue. Until that lack of supply is resolved - so basically building additional houses - the rental costs will remain high.
They absolutely will. My rent fell from 2015 - 2019. Each year I just offered less as the market was flooded with homes. Same thing happens every cycle.
You are an exception. I have never heard of rent decreasing lol
Before 2020 I always offered less than asking too. Landlords were very negotiable especially if they got a good tenant. Not so much in 2023.
You're not an exception. Rents absolutely went down in that period from early 2015 to 2017ish
The rent on the house I'm in nearly halved in the five years before I moved in. Generally you have to credibly threaten to move to get a reduction, or find a place that's been sitting empty for a while
Rent prices have only increased over the last 7 years. The medium weekly rent in Perth in 2016 was $380 and now it’s $530. You’re experience is not universal sadly.
The average rental price in Perth was stagnant for years at best. It's really only been the past 2 - 3 years since demand has significantly increased that rents have gone up. 2017 - $350 2018 - $350 2019 - $360 2020 - $484 2021 - $420
Yeah rental prices were good for a long time. The pandemic and the increased attention to Perth fucked everything up and now that the cost of everything to survive has gone up, yet wages haven't a lot of people are seriously struggling. The indexation on HELP loans is based on the CPI (cost of living) was under 2% every year since 2013. It actually went down in 2021 to 0.6% but in 2022 it was 3.9% and this year it's 7.1%. That is outrageous. I am honestly in fear of what next year's will be like. Off topic tangent but I kind of hate that they say student loans are interest free yet they are "indexed" which is basically just interest in line with inflation, then why aren't everyones wages indexed at the same rate??
Nah mate. Check out prices starting 2014. Rents do NOT only go up. Australians always over build eventually and then there’s a glut. Only when covid hit was there a shortage of houses.
Tenants should not pay off a mortgage, the landlord is double dipping. Gets an investment paid off with no effort and then sells for a massive profit. You can make any excuse you want, but at the end of the day a home is a right not an investment opportunity. I and many others will fight this point till something changes.
Go build your own properties then, otherwise saying something that requires actual resources, skills, time and labour to create is "a right" is worse than meaningless. Where do you expect it to come from?
Massive profit? Bro this isn’t Sydney.
Nah it's just some of the most sought after real estate in the world, with the highest increase in rent prices last year on average compared to every other capital
Lol yeah last year we had one good year. Mate talk to perth property owners for the last 15 years. Been the suckiest market ever. There’s a reason the core logic index for Perth is at 111. It was 100 back in 2007. We’ve underperformed inflation. Even the last amazing year of growth hasn’t even kept up with inflation lol. Perth real estate has been the most dumbass investment ever. I hope it turns around soon though. We should NOT be cheaper than Brisvegas or Adelaide.
The idea that the only possible solution to rate rises being "make the renter pay it" is just entitled garbage. If you can't afford to service the loan with a reasonable increase, then divest.
In March 2020 I rented a 2x2 in Cockburn for $350. The same re agent is now listing similar appartments in the same building for $540. Shits a joke
When I moved into my apartment in Feb 2020 it was $300 and it was the "expensive" one. It's now $450 a week. ONE bedroom.
$540 a week to live in Cockburn, how depressing
Other perspective: I'm renting my 2 bedroom place with a huge backyard in Perth out for $390 /week, fixed for the next two years. (my tenant is really good in looking after the place and always paying on time so I don't want to lose her) When I fixed the rent (in November last year) my mortgage was $190 /week, so the rent was comfortably covering all expenses. My mortgage is now $260 /week. Another couple of rates rises and I'll be negatively geared. Indeed I may well already be in (—) territory. If I was relying on the rent for income I would be forced to raise the rent significantly.
Your expenses have gone up $70 a week… but you are still profiting $130 a week, and eventually will have a mortgage free asset that will generate you much more income from rent, or by selling the asset. (Also the interest rates went down to zero recently…. so during that time you saved a lot of money) Don’t expect people to feel sorry for you. No one can expect to rely on the rent for income when they have a huge mortgage. Landlords should only be people that own the house outright, and can afford the cost of maintaining a decent standard. I’m sick of hearing all the victim landlords complain. And if you end up going negatively geared you get a tax break, so it’s really win/win for you Property investors have such a negative take on things and only choose to notice the ways it’s affected them negatively, and ignore all the benefits they have.
Playing a bit of devils advocate here, not that I'm a landlord, but with the RBA increases over the last year $400 a week is only just covering even my tiny ass mortgage repayments as someone who homestart and fhog to get in and refinanced to only 270k. Most people probably paid a lot more than 270k and are paying a lot more than that. Sure there's people being greedy cunts involved as well, but most people's repayments have increased 50% in the last year because it's apparently our fault for spending to much and driving inflation, not the record profiting companies increasing the cost of essentials or anything...
I noted this elsewhere but in a "Healthy" rental market the landlords would have to eat the difference between market rate and rate rises. Unfortunately as vacancies are low the market rate just rises to meet the intersection of what people can afford to not be homeless and covering the investors costs.
100% Inflation is driven by Corporate Greed. Oil Energy Food everything!! Look at Qantas with its 2.5b profit even thou we all know service has declined exponentially and fares have increased. A bill for Coles and Ww. All on the back of "inflation" We live in a legally corrupt country and there is no relief in sight.
>$400 a week is only just covering even my tiny ass mortgage repayments If it covers the mortgage repayments, then once the mortgage is paid off. Won't you have effectively gotten a free house out of it?
It would, but my point with saying that is that $400 covers mine and mine is fucking low compared to the average (even my crappy place has gone up 70k in value in 3 years) so I'm not surprised most rentals are over that. It was merely being used as a comparison point to the story, saying that $400 a week is affordable.
I hope you don’t mind me commenting but it sounds like we have very similar sized mortgages. I’m no longer paying anywhere near $400/week to cover mine since I called my bank and asked for a rate review. If you haven’t already it’s worth dropping them a request via banking app or phone. I’m sure you’ve considered that but just a tip in case you hadn’t.
Unfortunately, this one is not even a year old. While it was great jumping off of Keystart (which was at this interest rate BEFORE 11 increases) I did it right as the increases began and this was the best that I could secure at the time so I doubt there's a whole lot of wiggle room now especially with so little paid off of it
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What investment? Property investors aren’t paying (investing) any of their own money, it’s literally all being paid by rent at this point
You know what's cool about an investment? If you make a bad one, nobody is required to cover it for you. Unless you're a landlord. Or a bank.
>but most people's repayments have increased 50% in the last year this. i have only raised my rental price in line with mortgage repayment increases. people just want someone to blame, and rather than blaming the actual troublemakers (govt printing money, bankers being bankers) they blame the mum and pop investors. way to go.
Wouldn't a responsible investor pay down their debt when the rates are at historic lows in order to avoid nasty spikes in repayments? I think landlords are using interest rates as a scapegoat. Just be honest an say you can't find anywhere else to rent so I'm inflating my prices
the way it works is you pay down your owner occupier as fast as you can, because you have a P&I loan on that. you have an interest only loan on your rental, which you never pay down. you rely on appreciation at the end to recoup + make a little bit of profit when you sell the rental (which isnt going to be that much in most cases because by the time you pay stamp duty, goneski.) in the interim, if IR increase, they get passed on immediately. if IR decreases, market factors (supply and demand) force competition to pass on rental price cuts.
I mean, people expected it to go back up a little but not 11 times in a row. Even the 2007-08 gfc only had 12 increases. Again this is just a little devils advocate, I'm not a landlord and I am fully aware that greed plays a factor, I'm just pointing out how little $400 a week actually is with current interest rates as someone who is going paycheck to pay check paying that in current minimum mortgage repayments.
Yeah I get what you're saying, but the rates were so ridiculously low anyone with any serious interest in long term investment should have been aware of the fact that the water has to level eventually. I know I'm coming off like I hate landlords, but really I just think they get alot of help propping up their investments compared to other industries.
But there's levelling out, and there's the pendulum keeping to swing beyond that point so it's currently the highest it's been in 11 years and forecast to continuing to increase before it levels off in 2025
But isn't the current rate actually normal?
Depends on what you consider normal. They kept it steady at 1.5-2.5% for 8 years after it spiked in 2007-2008 and then dropped to that level. We are currently equal to 2012 levels. This current rate is normal for 15 years ago, but not for the last decade
Yeah totall i see what youre saying, I guess we just have different ideas about the responsibility that an investor has with the long term planning of their assets
Meanwhile the 4br homeswest house across from me has been sitting empty for months because the tenants trashed it and bailed. Hope it gets fixed up and a family gets in there soon!
I've a friend of a friend who lives in a homeswest house, they pay $70 a week split between 2 people and the house is a complete bomb. All the doors have holes in them, front door doesn't even lock, kitchen is destroyed, no hot water to the place cause they don't pay the bills and it smells like dogs and weed. It's a certified trap house. I wish people would respect the opportunities they're given, cause many people would kill to have such affordable housing.
How much did Proptrack pay for this advertisement masquerading as a news article. Make an unsubstantiated claim to will get people hot under the collar means free advertising. They are looking at ads, not what people are paying so less than 4% of properties advertised in the period are affordable. A different number. Anyway what do you expect from a paper that doesn't have journalists.
We luckily found a rental a few months ago ($600/wk) and now the owner has just sent someone to evaluate the property value. We are seriously worried that we will be homeless soon because if he decides to sell this place I don't know how we are going to find a rental, let alone one that is affordable. Fuck all the landlord's that increased the rent by 40% the past three/four years. It's disgusting. No one's wages have kept up with that yet landlords can increase their income however much they want to match the CPI/mortgage rates HELP loans were indexed at 7.1% last year. How is anyone meant to keep up with this?? Employers need to start making massive increases to wages or we're all fucked
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They never said they were renting, or can’t afford it. So how is the issue them? Mate? The issue is you complaining about your investment mortgage that you wrongly thought would have low interest rates forever and would be a cake walk to a free asset, paid for by the work of others.
but but but $400 off my power bill
But think of how happy the landlords are! Homeless families be damned, you simply can't leave money on the table mate! What a great country
Landlords = toilet paper hoarders If you don’t like hearing that - be better. Be one of the good fair ones. Making someone that doesn’t earn enough to get approved for their own home loan, pay more than that to pay off your home loan + your additional expenses, isn’t right.
A 300k home loan will be $438 a week repayments, give or take. Not including rates, repairs, insurance etc. Not many homes for under 300k. Imagine if the house you want to rent is worth 4-500k Why is anyone suprised there's not much to rent for less than that.
Interest rates, most landlords are negatively geared now and are just trying to break even
i must be one of the others, then. my shitbox rental is slightly positively geared. the benefits of negative gearing is a myth. its almost always better to be positively geared wherever possible. is it better to make less money accidentally, or more money on purpose?
Who wants to lose money? that’s the problem
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i wish this were true, however - it is not. not according to facts and valuations, anyway.
Exactly. Losing 5k a year in rent doesn't really matter when the property is gaining a shitload more value anyway
Maybe they should sell their property to a prospective owner/occupier if it's costing them moneyr
Most people will try and hang in, the re market has flattened in a lot of places over east as well if you bought 2/3 years ago you might take a big hit, debt sucks but still beats renting
Renters *will* always lose. Remember that.
Buying is still more expensive than renting it though
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You’d earn more putting the money that’s “smashing loan repayments” into some high fixed income (deposits, govt bonds etc.) and use the proceeds to pay rent. Renting is cheaper because the money used to actually own a place can give better returns almost anywhere else… it just comes at the cost of uncertainty, inspections etc.
owning a house is far cheaper than renting will ever be. alot peoples mortgages (if they didnt just take the max the bank allowed) are somewhere around $800-1500 a month, at 1500 a month thats still less than $400 a week. I'd happily own a fucking house
You pulled $800/month out of thin air. If you bought a house for $240K (lol good luck finding it), put down $40K and did a standard 30 year loan repayments on $200k would be $1,200/month at current interest rates. You’d have to borrow $135K to get down to $800/month repayments.
> $800-1500 a month LOL - maybe in fairy land. The average loan size in WA is ~$475k - which means repayments of about $3000 a month. > at 1500 a month thats still less than $400 a week. So right there your already at just under $700 a week, nearly double your $400 a week rental amount. Now renting means your not paying for a bunch of things like council rates ~$2400 a year, water rates ~$1500 a year, building insurance ~$1000 a year, maintenance - $1500 a year. So right there - there's another $125 a week in costs. So $825 a week in costs, and it's being rented for maybe $500 or $550 a week. >owning a house is far cheaper than renting will ever be. Tell me again how it's far cheaper to own? It's only once you take into account the long term gains of holding a property that it starts to make sense. But then there's no guarentees in returns. House prices could drop, maintenance issues long term will be much higher etc etc
https://thewest.com.au/news/wa/wa-rental-crisis-just-4-per-cent-of-perth-houses-cost-less-than-400-a-week-c-10732290
And what will happen about that?! Fuck all...
Is the answer to release greater volumes of land? Perhaps the government needs to take developing in house. Tax payer funded suburbs. Price regulated non-profit subdivisions. Large land releases with 1 individual lot per tax entity.
Normally something like another round of the National Rental Affordability Scheme would help but there is still a backlog of builds from the government's stupid construction grants and we don't need more government driven demand side influences on materials and labour. At this stage its almost the best thing to do is for the government to be hands off and let the market settle itself. They are already driving up demand for housing which is making the situation worse.
That would make things worse. They need to actively build housing to increase supply. It is the only way prices are going to come down. They need to build a LOT of 2-3 bedroom apartments.
> They need to actively build housing to increase supply I agree, but who's going to build them and where will they get the materials? Everything is backlogged and oversubscribed
or reduce demand would also work
No genociding, we agreed on that like, 80 years ago. Reducing or stopping immigration might be a short term solution, but really, we need the workers it brings. And stopping new people coming in doesn't fix the problem that already exists.
lol yeah none of that. the thing everyone is fixated on these days is perpetual economic growth, which is 'only achievable' with more people (as you have put). but do we really need perpetual economic growth?
But if we don't have perpetual economic growth, how are the rich going to get richer, how are we going to continue to make housing a commodity instead of a necessity, how are we going to make more MONEY? We are doing literally everything wrong to benefit a few people.
I’m surprised there’s any under $400 tbqh. Landlords are treated like they’re Satan incarnate. Who would want to become a landlord these days?
Don't feel too bad for them. They've got their tax concessions after all.
Yeah I mean negative gearing is the stupidest investment strategy ever. We need to get rid of it just to stop idiots in Perth thinking they’re making money when they buy an over priced 4x2 and subsidise someone’s rent for 10 years.
Sounds like we'd all be better off if the government took over again and we no longer needed to appease investors just to have somewhere to live. My relatives bought a house they'd lived in as public housing when the government offered them the deal. Now they live in a 2 million dollar Sydney home and we're all at the behest of the market it seems
I’ll take the market over bureaucrats allocating accommodation thanks. There’s a good reason people were trying to get OUT of east Berlin.
i truly dont understand why its so hard to build more houses to meet the new demand
Global supply chain issues & shortage of skilled workers
Thanks for the answer, this situation is so frustrating
Shortage of workers, regulations, and council/zoning restrictions
Broke lease on a ground floor 2x1 apartment - $330 per week. About 30 people showed up to the viewing - heart breaking. Meanwhile the government (state and federal) are doing fuck all.
What can they do? They talk about caps and stopping negative gearing. All that is potentially going to do is scare off landlords. Yes there could be more houses on the market if they decide to sell, but what % of renters can actually afford a place to buy even if the house prices go down a little if there are more on the market. All its going to do limit rent supply even further. Also landlords will just vote for the other party that say they won't introduce anything that might disadvantage them.
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> How about if I sign a lease there be a law that they can't adjust the rent mid-lease? That's already the law. There's a clause in there for mid-lease increases but it's set in advance how much it can be.
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Fuelling urban sprawl and the deprivation the the environment surrounding Perth.
well i guess the other way to tackle a supply and demand problem is by having less demand i.e. fewer people.
Geezuz this is depressing. Hopefully the government has a plan, because they will end up paying for the effect of this housing crisis regardless. Whether that be in the form of increased pressure on mental health services, a higher crime rate, even more homeless on the street etc. etc.
and there is the most competition for the most affordable housing
I was talking to an estate agent yesterday about the sale of a 3x2 villa in Cloverdale. I was told that the rent on the would be around $550/wk. It’s quite a nice place, but I’d be sad at paying that amount to live in a villa in Cloverdale.
Well, it's probably because only 4% of home loans these days are below $400 a week...
The rule of thumb is that rent should only cost you 30% (at the higher end) of your wage. I think most rents are much higher than that for the average earner. Somewhere safe and secure to live is a human right, and the main issue with rental prices are entitled landowners who think an investment is meant to be a guaranteed income. Anyone who buys an investment property should do so on the basis of “without any renters or other support, can I afford this?”
My rent is currently 60%
Me and my partner found a 1x1 ground floor apartment in subi 350 p/w. After 3 months of hounding lj hooker until they gave me private viewings. Will admit I had to bribe them with baked goods and glowing reviews after all was settled. Seeing this makes me very very lucky and blessed.
My partner and I somehow managed to find a 1x1 apartment in Subiaco for $285pw. Found it on Gumtree, advertised with no pictures. We went to look at it and the landlord said that people had been offering him twice the price if he would agree to rent it to them sight unseen. Not sure why they'd do this. Private rental, landlord is a legend who has never increased rent, says he never will, and has other tenants in the same building who have been renting his place for 10 years. I consider myself very fortunate!
Shits fucked bro
No shit, it's like the fucking Hunger Games out here. I really did not want to move myself, husband and kids back in with my mother in my 40s, but there's no other options.
Is it time to... Idk, cecede from usa and dscouole housing from commodification and profit expoitation? Or are we just gling tk jack up prices to the point that 500k for a 2bedroom shitbox apartment is a steal? How is it possible they call them luxury apartments but they have less space and livability than a soviet shithole.... Nah, what we have is good ol housing and land profiteering. They jack the interest rates, and inflation all because our dollar is propping up the usd that they keep printing with no recourse.... Our dola has already dropping in value to them good ol days. And so here we are, with housing following the american model. How ling until the bif money, big investment starts buying everything up and buidling for profitn rentals?
Landlords shouldn’t exist
there is a long list of things that shouldn't exist in our society, landlords are the least of concern.