Property Investors Crucial

These comments are the writer’s own and do not necessarily reflect the current opinions and policies of the Real Estate Institute of Western Australia.

CHOICE, National Shelter and The National Association of Tenant Organisations got their heads together recently and released a report that considered the consumers’ experience of renting property in Australia. One of the report’s key claims was that more than half of all tenanted properties needed repairs to them and that most tenants felt insecure and were required to move from tenancies more often than they’d have liked.

The report, on the whole, is an exercise in “landlord bashing”, an increasingly popular pursuit from some sectors that consider personal aspiration and personal wealth building as some sort of unjustifiable evil.

It’s important to ensure all tenants are protected by laws that ensure they are entitled to the quiet enjoyment of their home, that essential maintenance and repairs are done well and quickly and that those landlords that break those laws are held to account. The report’s findings that half of all properties required repair is not an accurate reflection of what constitutes necessary repair. Currently, the Residential Tenancy laws in Western Australia work well; they are reasonably well balanced and generally in favour of protecting tenants.

However, there is a disturbing push from certain groups to swing this balance too far towards favouring tenants. This is risky because it (especially once combined with changes to negative gearing laws likely with the change of federal government) discourages property investment. This could be the outcome the writers of the report are after but is this some sort of ideological pursuit or a genuine attempt to improve tenant’s lives? Hopefully, it’s the latter but limiting property investment always (yes always!) delivers higher rents and less choice to tenants so what is it they hope to gain?

One major finding around tenants’ feelings of insecurity around the short term nature of residential tenancies is, frankly, down to the tenants themselves yet somehow this has been “blamed” on the landlords. There is no laws preventing a tenant seeking a longer term lease. Most landlords want a long-term tenant. Six month or 1 year tenancies are always initially at the request of the tenant.

There will always be millions of renters in Australia and rents will rise and fall in accordance with the free market prevalent in the way our society functions. Governments ought to be careful about making changes to tenancy laws without considering the long term fluctuations in the market. In WA, rents have been stable at $350 per week for 18 months.

Privately owned investment properties provide millions of Australians essential and affordable (in WA renting is way more affordable than home ownership) housing. Without those investors, governments will need to provide those homes and in WA our government already has 14,000 people waiting for them to build them.

by Hayden Groves
REIA Deputy President

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