A Brisbane real estate agency has urged landlords to consider rent increases of more than 20% as Australia is struggling with a worsening rental crisis.
An email sent by West End’s Ray White asks landlords whether their properties are over-rented before advising them to increase rents by more than double the rate of inflation.
It happens before Queensland The government is set to hold a housing summit this week to tackle rising homelessness and the stress of renting.
The email said the agency finds that “many landlords are not provided with the information to make an informed decision” and are being advised to sign long-term leases with rent increases of just $5 to $20 a week.
“Our property managers reviewed all lease renewals and recommended an average rent increase of 17% for leases renewed in October and November of this year,” the email said.
“As we plan to renew our lease in December, the average lease renewal recommendation is over 20%. That could be up to $10,000 a year in additional rental income.”
The agency says most tenants are “agreeable” to the rent increase, saying that when they “look at what is available on the rental market, they understand” it is “fair and reasonable”.
“On average, apartments in West End/Highgate Hill/South Brisbane/Brisbane CBD rent for $480-$520 for one bedroom. [a week and for] two bedrooms $675 – $850+ [a week]”, says the email.
“If you’re not achieving those rental rates (at a minimum), you have to ask why?”
Chief executive director of St Tenants QueenslandPenny Carr, says the email shows the “cyclical price increase” taking place across Australia with rising rents.
“Rents are unaffordable for people at the moment, and tenants are forced to absorb the increase for fear of finding another property or becoming homeless,” she says.
“We should only allow rent increases above the CPI if it is justified and the property has had major work done or something needs to be replaced.”
Carr also says the email also dispels the land tax myth offered by the Queensland Government for interstate investors will result in higher rents.
“Rents have grown phenomenally over the last 18 months and that’s because of the amount of vacant space and supply and demand,” she said.
Carr says the introduction of a register of landlords would provide greater transparency for the state government, giving them information to guide policy.
Asked about the proposed increases, Ray White West End director Luke O’Kelly said rental affordability “will deteriorate if investors lose confidence in the Brisbane housing market”.
“Over the past 12 months, Brisbane has seen the strongest population growth in the country, and this has been most clearly reflected in rising rents,” O’Kelly said.
“Brisbane currently has a shortage of homes for those who want to live here … with rents rising so fast, Brisbane needs more property investors.”
O’Kelly said population growth and flooding have pulled “property out of the rental market.”
“So it was a relief that the state government recently dropped the proposed changes to the land tax that would have deterred interstate investors,” he said.
The Australians paid an additional $7.1 billion in rent last year, the average renter spent $62 more per week than a year ago, or more than $3,000 per year.
Greens housing and homelessness spokesman Max Chandler-Maser says the email shows urgent intervention is needed to protect tenants from unfair rent rises.
“It’s these outrageous price increases that show exactly why we need a national two-year freeze on rent increases,” he said.
The Queensland Housing Minister has been contacted for comment.