Landlords, renters struggle to find balance | Ralph Lauren

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Tenant-landlord relationships look to have soured in the wake of COVID-19, as job losses and financial stress brought on by the pandemic continue to constrict tenants’ pockets.

Following unprecedented controls on consumer activity in Western Australia, the state experienced a 104,000-job drop from February to May, recording the nation’s highest unemployment rate of 8.1 per cent, though this has since settled to the second lowest rate of 6.6 per cent, recorded in October.

According to the government’s June 30 WA Impact Statement COVID-19 Pandemic, the cohort most affected by joblessness has been Western Australians aged 15 to 24, who copped more than 40 per cent of the state’s job losses.

With the average buyer of an Australian home aged 34, according to the Australian Bureau of Statistics, and the majority of young adults leaving the nest aged 19 or 20, many of the 42,500 young people affected in WA are likely renters.

To squash the threat of mass evictions, the WA Government introduced emergency tenancy laws to help people stay in their rental homes and, controversially, extended them to March 28 of next year.

These moves included banning spikes in rent, specialised support for landlords and grants for tenants in need of relief.

Despite intervention from the state to keep WA tenancies afloat, the Australian Housing and Urban Research Institute’s November study into renter-landlord relations showed a sinking ship.

According to the research, 60 per cent of tenants were experiencing or anticipating issues with payment of rent and half of all rent relief negotiations were not resolved to the satisfaction of the tenant.

The report found some tenants were unable to pay utility bills, were skipping meals and many were afraid to approach landlords for rental assistance due to worry about future repercussions, such as receiving poor references or property defects going unfixed.

Only about 50 per cent of tenants that asked for rent reductions were given the nod, while some landlords were experiencing financial challenges, stress and confusion.

Unpacking the landscape in WA, Circle Green Community Legal Client and Corporate Manager Carmen Acosta said in the pandemic’s early stages, tenants were waiting up to three weeks to see a lawyer, with 90 per cent of calls pertaining to COVID-19.

She said help from landlords had been a mixed bag.

“Some landlords have been very understanding, but overall it’s been difficult to assess,” she said.

“There have been some positive outcomes and good negotiations between parties, but a bit of an ‘us and them’ mentality has developed between landlords and tenants, in that both are looking to protect their own interests which can come at the expense of the other.

“There have been some problems with court processes not working effectively – tenancies being terminated at a higher rate for things like ‘undue hardship’ of landlords which, prior to COVID-19, was very difficult to get – yet now courts seem to be making these orders much more frequently.

“We are aware that landlords are finding other ways to evict tenants so that they can get a new tenant who will pay higher rent.

“This is because the rental market is so competitive, as landlords are unable to increase rents under existing agreements due to COVID-19 provisions.”

Given the tumultuous situation, Ms Acosta declared it essential for the state’s moratorium to continue to protect vulnerable people and families, though she acknowledged the legislation had led to landlords choosing not to lease their properties.

She said this had contributed to astoundingly low vacancy rates, a tougher rental market and the accrual of large rental debt that tenants may not have capacity to pay.

Due to the swirling problems, Circle Green is advocating for a gradual termination of COVID-19 measures, for landlords and tenants to engage in discussions about future tenancy now and for landlords and agents to think carefully about raising rent, with the advocate deeming the 20 per cent hikes currently floated by some people as unreasonable.

Meanwhile, REIWA has firmly opposed the State Government extension and described itself as “extremely disappointed” with the measures.

REIWA President Damian Collins blasted the decision as one that made no economic sense, made it harder for tenants to find housing and ignored the needs of landlords.

“It appears the government has used the pandemic as an opportunity to introduce rent control and meddle in the free market,” he said.

“We already have a shortage of rental stock and reducing supply further by dissuading landlords will ultimately mean tenants will find it even harder to get a property.

“Instead of an extension with the law as it is, the government should have included extra criteria to ensure those who were seriously impacted financially by COVID-19 would receive the support they needed.

“In a time when we need more investors entering the market to help build up rental stock supply, we are putting up barriers to not only prevent new investors, but also not helping those currently providing a basic human need – housing for all Western Australians.”

To fight the State Government’s moves, REIWA has launched its A Fair Go For Landlords during COVID-19 campaign and is calling on decision-makers to relinquish their grip on the free market.

West Real Estate approached the Property Owners Association of Western Australia, but it declined to comment.

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