How tenants can save on rent now
Rents paid for residential properties have had their first annual fall in at least 47 years, but tenants are being urged to avoid using this to drive a hard bargain.
Australian Bureau of Statistics inflation data shows rents dropped 1.4 per cent nationally for the year to September 30, although the fall was not uniform.
Inner city apartments in major capital cities have suffered sharp drops - sometimes near 20 per cent - but several smaller capitals and regional areas have strong rental demand.
Property specialists say tenants and landlords should be careful, considerate and keep communicating.
Real Estate Institute of Australia president Adrian Kelly says the annual fall was the first since the ABS started measuring rents in 1973.
While the impact of COVID-19 on the nation's eight million residential tenants has been less than first feared, tens of thousands have sought and received help.
"The vast majority of landlords who can afford it have been doing deals with tenants," Kelly says.
Here's what tenants and landlords need to remember.
"When negotiating rents be very open and fair - the pandemic won't be here forever," Kelly says.
"It's better for tenants and property owners to be getting on well with each other."
Freelance makeup artist Jessica Lilley, 36, watched her work disappear during the pandemic and leave her financially strained.
"My landlords were an amazing support to me during this time," she says.
Lilley's landlord reduced her rent for three months and she received a government replacement rental bond to cover some arrears, and now she is back paying full market rates.
"My main advice would just be to keep lines of communication open," she says.
Turner Real Estate CEO Emma Slape says only a handful of tenants in her large agency remain on rental relief or deferment.
She says tenants should keep the property in good condition and be reasonable with maintenance requests.
"Paying rent on time is always number one," Slape says.
If looking to move, keep rental references up to date and be prepared to be flexible about the location if competition is strong, she says. Check the market with a local agent, or real estate websites that show interest from prospective tenants.
TIPS FOR LANDLORDS
"We have seen that landlords are generally happy to leave the rent at the same rate or do very modest increases of perhaps $10 on a house and $5 on a unit," Slape says.
"I think people value stability at the moment.
"Interest rates are low, expenses are down, and the cost of someone moving out and then re-tenanting that is still fairly substantial."
Slape says landlords who look after their tenants in the current climate should be rewarded. "They will be extremely loyal for a long time," she says.
Landlords should also check with mortgage brokers and lenders to ensure they are getting the lowest interest rate on their loans.
If you tell your lender you are tempted by another offer, you will almost always get a reduction," Slape says.
Kelly says landlords in struggling areas such as inner city apartments are "just going to have to meet the market, unfortunately".
"Every week you don't receive a rental payment you don't get that back, ever," he says.
"It's simple supply and demand."
Eviction bans and moratoriums on rental increases are starting to disappear, but landlords with interstate properties need to be careful to understand the rules in relevant states, Kelly says.
RENTAL MARKET NUMBERS
• The average national asking rent is $443 a week
• Capital city rents are down 0.1 per cent year on year.
• Regional rents are 3 per cent higher year on year.
• Rental yields for landlords are 3.77 per cent, down from 3.99 per cent a year ago.
Source: CoreLogic, September quarter 2020
Originally published as How tenants can save on rent now