EDITORIAL: Renting has become a complicated issue!
The Covid-19 coronavirus pandemic has led to the loss of many Australian jobs. Unemployment in a growing number of sectors has now led to a difficult stage where the ability to pay rent for private and commercial properties is becoming increasingly difficult for many Australian families and businesses. The issue of residential renters is very complicated because there are several parties: the bank and homeowners who owe to the banks. As people lose their income, they are faced with the undesirable situation of struggling to pay rent. But if the rent stops then the property owners could be forced to repay the banks. Fundamentally the banks will need to consider how to assist this crisis. The Federal Government has said that rent increases will be on hold until the economy settles from the pandemic, but how long will this last? With the closure of many small businesses it remains to be seen what the long-term impact will be on the property owners and the economy.
States are working on a mandatory code of conduct which would force landlords to provide rental reductions for commercial tenants on par with revenue loss. Prime Minister Scott Morrison said, “how that is done inside the lease is up to the landlord and the tenant". This could lead to a solution if governments lead the negotiations.
NSW Treasurer Dominic Perrottet said states and territories would be “in a position” to waive and defer land tax to landlords who pass on rent relief to commercial and retail tenants. For this to succeed there must be transparency.
Federal Opposition leader AnthonyAlbanese also called on real estate agents to “reduce the pressure” on tenants rather than “add to it”. He said reports suggested some real estate agents were offering unsolicited financial advice to tenants, suggesting they access their superannuation fund early in order to make rent.
Some of the tenants are still working and are receiving payment while they are on the register at Centrelink and are receiving rental assistance from the government. With a rise in unemployment this situation must be closely monitored.
This is a complicated issue that requires further study and close look before any decision is made that will have long term impact on the Australian economy.