renters pay out of their homes as landlords pass on the costs of the RBA rate hikes

renters pay out of their homes as landlords pass on the costs of the RBA rate hikes

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<p><figcaption class=Photograph: James Ross / AAP

Tenants who have already seen their rent rise to inaccessible levels in response to interest rate hikes fear they will face further hikes after the Reserve Bank of Australia raised the exchange rate for the fourth consecutive month.

Travis Jordan lived in a three-bedroom townhouse in Brunswick, north Melbourne, but had to leave after his rent increased by $ 90 a week and a roommate moved out.

“We wanted to stay, but with just two of us instead of three we can’t afford that kind of rent increase,” Jordan said.

“The real estate agent said that’s where the market is. They said: ‘we are generous in a difficult time’ ”.

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Australian Housing and Urban Research Institute Chief Executive Dr Michael Fotheringham said recent interest rate hikes by the RBA are having a ripple effect for investment property owners and, by extension, their tenants.

“When the mortgage payments increase, the owners try to cover it by increasing the rent … [and] raising interest rates increases mortgage payments, “he said.

Fotheringham said rental vacancies were also at an “all-time low”, hovering around 1% for nearly four months. With “demand outstripping supply,” owners “can afford to be a little more ruthless,” she said.

“You honestly get an answer ‘if you don’t like it, go away’.”

That’s what Lee Davis-Thaleourne and his partner were told when their rent increased by $ 140 a week. In June, they received a new 12-month lease, increasing the rent from $ 450 to $ 590 per week. “We looked at it and thought, there’s no way,” she said.

“It would have taken every last dollar we had. We would not be able to save anything ”.

After making a counter offer that was rejected, Davis-Thaleourne and her partner, who live in Victoria, had 60 days to move in. But with her partner’s wheelchair accessibility needs, the search wasn’t easy.

“We needed something that had some level of elevator access, bathrooms designed for people who need to sit down to shower,” he said. “The new place we’re in isn’t as good from an accessibility point of view.”

And not everyone has the financial reserve needed to move.

Jemima Mowbray, head of policy and advocacy at Tenants’ Union of NSW, said that on average a family costs about $ 4,000 each time they move, not including the cost of the bond.

“You’re dealing with the stress of not being able to find a home, struggling to find something cheaper,” he said. “But you also accumulate a debt.”

As financial pressure builds, Mowbray said “more families are unable to cover the costs of basic needs.”

“Many people are struggling”

Wayne Jansson, a tenant in a rural town in northeastern Victoria, said his rent was $ 190 a week. But after a rent increase a year ago and another in July he now pays $ 260.

“When people say you have to choose between paying rent, electricity, food and medicine, that’s absolutely correct,” he said.

“A lot of people are struggling right now. It’s not just rent, it’s the cost of everything.

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“I ran out of money before I paid for everything – it’s just outrageous.”

Newtown’s New South Wales Green MP Jenny Leong said there was a “desperate need” to reform rental laws. She presented a new bill to the NSW Parliament “regulating measures to provide relief and protection to renters.”

“People go to libraries or community spaces to stay warm because they can’t afford to pay the rent and keep the heat on,” he said.

The bill provides for a ceiling on rents in line with the consumer price index.

ACT limits rent increases to Canberra’s rent inflation rate plus 10%, and in Victoria, last year’s Residential Tenancies Act reforms required tenants to receive 60 days’ notice for a rent increase. proposed.

“NSW, we don’t have those kinds of limits,” Mowbray said. If a tenant asserts his rights and disputes a rent increase, he risks losing the lease.

“Tenants also risk a bad reference when looking for their next property, which makes it very difficult to find a place to live,” Fotheringham said. “There is a distinct imbalance. The power belongs to the landlord ”.

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