Absolute nonsense, hot air, pure bs! It doesn't attack the root of the problem, investors crowding out home buyers, investors using tax incentives to get richer. The government always pandering to the rich and the votes. The government like a fox looking after the hens.
"This is a smoke-and-mirrors announcement designed to make it look like Labor has done something meaningful for renters, when in fact they have basically enshrined the status quo, leaving renters exposed to astronomical rent increases once a year. National cabinet sets new housing target and touts 'better deal for renters'By Erin Handley Posted Wed 16 Aug 2023 National cabinet announces plans to boost housing. The prime minister has touted a "better deal for renters" and a blueprint to boost housing supply following a meeting with state and territory leaders in Brisbane. Key points: National cabinet has set a target for new homes built over five years from July 2024 States and territories will move towards limiting rent increases to once per year and requiring reasonable grounds for eviction The Greens have slammed the rental measures, describing them as "smoke and mirrors" National cabinet set a new target to build 1.2 million new homes over five years from July next year. The new target is an additional 200,000 homes above the National Housing Accord target agreed by states and territories last year. "All governments recognise the best way to ensure that more Australians have a safe and affordable place to call home is to boost housing supply," Prime Minister Anthony Albanese said in a press conference. Housing was the number one priority on the agenda for the prime minister and the premiers, amid rising rents and a shortage of housing during a cost-of-living crisis. Mr Albanese said the jurisdictions would move towards national consistency on requiring reasonable grounds for eviction, limiting rent increases to once per year, and phasing in minimal rental standards. Those measures are already in place across much of the country.Rent increases are not limited to once a year in the Northern Territory or Western Australia, where the rents can be hiked every six months, but the WA government flagged a switch to 12-month increases earlier this year. "We're not in a position to flick the switch and just change eight pieces of legislation across states and territories immediately," Mr Albanese said. Mr Albanese said the rental measures would "make a tangible impact for the almost one-third of Australians who rent". But they were disappointing to the Greens, who have been pushing the government to go further. "Today the government just spat in the face of the nearly 8 million people in this country who rent and offered them basically nothing," Greens MP Max Chandler-Mather said. "This is a smoke-and-mirrors announcement designed to make it look like Labor has done something meaningful for renters, when in fact they have basically enshrined the status quo, leaving renters exposed to astronomical rent increases once a year. Max Chandler-Mather says the national cabinet announcement means nothing for renters.(ABC News: Matt Roberts) "I want to be crystal clear. We were willing to negotiate a softer cap on rent increases, were willing to discuss ACT-style caps on rent increases." Shadow Minister for Housing Michael Sukkar also criticised the announcement, saying it delivered "no guaranteed investment in new housing stock, no concrete plan on increasing housing supply and nothing for first home buyers struggling to get into the market". "Once again, Australians struggling to buy their first home, pay their rent or meet skyrocketing mortgage repayments have been abandoned by this government," he said. National Cabinet hopes housing supply to be increased by federal incentive payments.(Laura Tingle) $15k incentive payment per new home for states The federal government has also promised $15,000 for each new home the states and territories build in addition to their share of the 1 million well-located homes, totalling $3 billion in "incentive payments". "An additional 200,000 homes with $3 billion allows for an incentive of $15,000 per additional home over and above the 1 million that had previously been agreed to," Mr Albanese said. The National cabinet met in Brisbane to discuss housing supply and renters' rights. (AAP: Darren England) It is understood the $15,000 can then be spent how states choose. Mr Albanese said the aim was to encourage jurisdictions to make reforms to boost housing supply and increase housing affordability. The housing target will be supported a $500 million competitive funding program for local and state governments to "kick-start" housing supply. National cabinet also agreed to a National Planning Reform Blueprint, which included promoting medium and high-density housing in well-located areas close to existing public transport, and updating local governments' strategic plans to reflect housing policy targets. Master Builders Australia, the peak body for the building and construction industry, applauded the housing measures and urged all levels of government to implement them as "a matter of urgency". "Master Builders had forecast that we need at least 200,000 dwellings constructed a year in order to meet demand," the group said. "We need to go to the root of the supply problem, getting projects off the ground which are lagging due to a combination of high costs, a declining investment appetite from rising interest rates, and delays in approvals." Peak housing advocacy bodies Community Housing Industry Association (CHIA) and National Shelter said the national cabinet announcement was a "step in the right direction". "Inclusionary zoning promises to be a real policy breakthrough," Wendy Hayhurst, the CEO of CHIA, said. "It should ensure that new housing developments include a percentage of social and affordable homes, significantly expanding housing options for people on low and modest incomes." National Shelter CEO Emma Greenhalgh said a national limit on one rental increase per year was "a long-overdue reform". "Despite this, rental reform remains unfinished business. We need upper limits on the quantum of rent increases for tenants to provide them with genuine stability and security," she said. The Greens have not supported the government's signature housing bill, the Housing Australia Future Fund (HAFF), in the Senate, saying they want the government to impose a two-year rent freeze and rent caps. The $10 billion HAFF would help to pay for up to 30,000 new social and affordable homes over five years, but the bill has stalled in the Senate. Grattan Institute Economic Policy Program director Brendan Coates has said rent caps would risk "doing more harm than good". "We'd end up with less and lower-quality housing … Rent controls dilute incentives for developers and investors to build new housing and maintain the existing housing stock," he told ABC.
OPINION Why Albanese’s housing solution will help, but only a bit Ross Gittins Economics Editor August 23, 2023 https://www.smh.com.au/business/the...will-help-but-only-a-bit-20230822-p5dyf9.html What climate change and housing have in common is their great effect on the future wellbeing of our children. With housing, the fundamental problem is that our present arrangements favour those who already own a home (or two) at the expense of those who’dliketo own one. Illustration by Simon LetchCREDIT: Those who are well set up in the property department love seeing the inexorable rise in their wealth. The more unaffordable their home becomes, the happier they are. Because there are double the number of home owners to would-be home owners and other renters, politicians on both sides have gone for decades professing great concern about the plight of would-be first home buyers while doing little or nothing to help them. This means housing is becoming hereditary. Young people can afford to buy a home only with help from their parents, but parents can help only if they’re well-established home owners. Without so much help from parents, home prices would have to fall to make homes affordable. So, the Bank of Mum and Dad has become an essential part of the system, but it works to keep home prices unaffordable to those without access to that bank. Renting used to be seen as a temporary, transitory state. This is why state governments have never worried much about the treatment of tenants and have easily yielded to pressure from landlords to give them the upper hand. National cabinet has backed a deal to set a new target to build 1.2 million homes over the next five years.CREDIT:ALEX ELLINGHAUSEN It’s always been the case that poor people rented all their lives, but now the poor and the students are being joined by middle-class couples who’ve got on with having kids rather than waiting until they can afford a place. We’re acquiring a large underclass of people who’ll never manage to afford a ticket in the home owners’ club. Until now, the problem of “housing affordability” has been seen as a problem for would-be home owners. Last week, the focus shifted to rent affordability and the poor treatment often dished out to renters. Economically, this has happened because, at a time when the price of everything we buy is rising faster than our wages, rents have been positively shooting up. Why? Because, suddenly, there are so few vacancies; because the number of people needing to rent almost exceeds the number of properties for rent. Politically, the spotlight has turned on renters because the Greens have been taking votes from the two majors by billing themselves as the party for renters. Meanwhile, the nation’s economists, whose usual focus has been on the way tax and pension rules have pushed up home prices by adding unduly to thedemandfor homes, have reached a new consensus that it’s really the inadequate supply of homes that’s the problem. Right now, that’s obviously true – especially in the supply of rental accommodation. But if you look at our record over recent decades, supply hasn’t had much trouble keeping up with demand, so it’s not the main thing that’s pushed prices so high. So, on the face of it, Albanese’s new agreement with the premiers to facilitate the building of 200,000 more homes than the previous target of 1 million extra homes, over the five years from next July, doesn’t seem such a big deal. Most of those probably would have been built anyway. What’s different is that they have to be new “well-located” homes. Well-located means “close to existing public transport connections, amenities and employment”. Get it? “Well-located” is code for medium- and high-density housing. Most people want to live close to the centre of capital cities – or at least close to good public transport to the city – and economists now believe it’s council zoning restrictions on high-rise that’s done most to drive up home prices “where people want to live”. So, premiers Daniel Andrews and Chris Minns have signed up to more high-rise. But agreeing to targets is one thing; delivering them is quite another. The premiers will meet plenty of objections, obstructions and foot-dragging. That’s the other thing that’s different about Albanese’s new deal. He’s offering $3.5 billion in “performance-based funding” to those states that achieve more than their share of the original 1 million target. Each of the further well-located 200,000 homes their state’s builders produce will bring the premier a $15,000 bonus. You’ve heard what they say about getting between a premier and a bag of money, so let’s hope it works. Ditto the premiers’ promises to reach a national agreement requiring landlords to have reasonable grounds for eviction, limiting rent increases to once a year, and phasing in minimum quality standards for rental properties. When it comes to getting premiers to agree on harmonising regulations, I wouldn’t hold my breath – unless there’s more money on the table, of course. Ross Gittins is the economics editor.
The advertisement, posted to Gumtree on August 9, is listing a 1999 Ford Transit as an “on-site camper” for a family of up to four to rent out. Credit: Gumtree/Adobe Parked van being rented out for $350 per week in Hilton shines light on Perth’s housing crisis Harriet Flinn PerthNow August 22, 2023 A peculiar “property” advertisement on Gumtree is offering renters a parked van on a driveway in Hilton as accommodation for $350 per week, once again shining a light on Perth’s growing rental crisis. The advertisement, posted to Gumtree on August 9, is listing a 1999 Ford Transit as an “on-site camper” for a family of up to four to rent out. Described as a “private property for rent” and to “not be driven”, the ad details a long list of the van’s amenities including; full central heating, a gas stove top, a three-quarter bed, a hot water system, a portable toilet, and more. A peculiar ‘property’ ad on Gumtree is offering renters a parked van on a driveway in Hilton as accommodation for $350 per week, once again shining light on Perth’s growing rental crisis. Credit: Supplied Although the listing says the van “will sleep 4 comfortable”, the photos only show one bed fully extended, with a sleeping bag, towels and a bar of soap laid out on top. The “portable toilet” which is described as “easily emptied and cleaned” (but not specified as to where or how the waste is disposed), is seemingly a makeshift toilet out of a Bunnings bucket with a tube running into it. Other photos show more of the van’s interior, with a microwave, kettle, stovetop and a Waeco fridge. Also in the van’s listing, the ‘tenant’ offers the future renter possible amenities if needed, including a toaster and a radio clock/alarm, as well as access indoors weekly to their washing machine. They ended the listing by saying: “Thanks for reading to the end and hope I can help someone or family in need at some time even if it’s only for a short or long time stay.” The possible ‘portable toilet’ mentioned in the listing doesn't specify how or where the waste will be disposed. Credit: Supplied. Currently listed at $350 a week, the rental advertisement shines a light on the recently growing cost-of-living pressures and hiking rent property prices across Perth. A PropTrack Market Insight report, released in July, shows Perth rents are now up 15.6 per cent year-on-year, hitting a median of $520 per week across all dwellings. And with a 0.9 per cent rental vacancy rate across Perth — a balanced rate is said to be between 2.5 and 3.5 per cent, according to REIWA — the housing crisis is leaving many individuals not only struggling to pay rent but also to find and retain suitable accommodation. The interior of the van is listed on Gumtree. Credit: Supplied Only one bed can be seen in the listing, with shows a sleeping bag, towels, a bar of soap and other amenities lying on top. Credit: Supplied In response to the nation’s housing shortage and calls for a rent freeze, Prime Minister Anthony Albanese announced on Wednesday a new $3.5 billion housing plan across Australia which would offer the States a $15,000-per-home cash incentive. It is hoped the additional funding will help renters in Australia (and Perth) get back on track and move into a less stressful housing environment. Read the full ad: The Gumtree ad. Credit: Gumtree
Janet has been homeless for more than two years. She's telling a Senate inquiry into the rental crisis how it feels By Laura Lavelle Posted 57 minutes ago https://www.abc.net.au/news/2023-08-23/qld-worsening-housing-crisis-senate-hearing/102761534 No relief for renters as median rents rise to $520 a week nationally Nearly two-and-a-half years of anxiety, turmoil and grief have been boiled down to a five-minute speech. Janet has rehearsed it over and over again, desperately hoping what she has to say will sink in for policymakers. Since April 2021 she's shared a caravan on her brother's property in Queensland after she was forced out of her long-term rental in Tasmania. She sold everything she had to make the move. "It felt like what I would imagine [it would feel like if] my home burned down; where I lost basically everything, but it was all in slow motion over a period of months," she said. "My past now feels like it has been erased." Janet has lived in this caravan on her brother's Queensland property since 2021. (Supplied) Janet doesn't have a bathroom, a toilet or hot water, and survives off pre-prepared meals or cooks in an electric frypan. She also shares the caravan with a sibling. "I do not do drugs, I do not drink alcohol, I don't gamble. I do not see how I could have contributed to find myself on this path of homelessness," she said. "Never in my life have I felt so helpless, forgotten, discarded and alone." Janet shares the caravan with a sibling. There is no hot water or bathroom. (Supplied) On Wednesday, Janet and others will share their stories at a public hearing in Brisbane into the worsening rental crisis in Australia. The Senate inquiry will consider rental vacancies, rising rents, tenants' rights and affordability. Rent hikes put tenants in 'jeopardy' Robyn Cook has been renting for four decades. This year, her rent went up more than it ever has before. "We got an email to let us know that our rent would go up close to 33 per cent. Which was an extra $160 a week," she said. "That gave us quite a shock. That was just awful actually. We weren't expecting that." Robyn wants the conversation to move on from home ownership. Robyn Cook said her rent increased by $160 a week.(ABC News: Stuart Bryce) "A home is so important to us for stability, for privacy, for a safe place for families. And we shouldn't have to constantly feel as though this is in jeopardy because of the next rent increase and how much that might be. "My Australian dream is less about the property I own, and more about the area and the community where I've established myself. And that's what I'd like to see the focus shift to." 'This doesn't cut it' Robyn wants the government to act. "There needs to be immediate interventions for people that don't have accommodation, for people who are sleeping in their cars; workers, carers, any number of people," she said. "Families in tents just doesn't cut it, not in modern Australia." Queensland Council of Social Services chief executive Aimee McVeigh said the state is in the grip of a housing crisis. Aimee McVeigh will speak at the Senate hearing.(ABC News: Dean Caton) "People are currently struggling to keep a roof over their head across our state. We know there are families currently living in cars, tents or hotel rooms," she said. "We know that right across the state, there's barely a property affordable for a frontline aged care worker. "Today is an opportunity to put those facts on the table but also to present the solution." Public hearings will continue on Thursday in Sydney, before moving to Canberra next week. Submissions are open until September 1. An interim report is due by September 23 to help the National Cabinet as it deliberates on renters' rights. The final report is due by November 28 this year.
More people renting for life’: Australian dream disappears in bleak forecast By David Crowe and Shane Wright August 24, 2023 https://www.watoday.com.au/politics...ppears-in-bleak-forecast-20230824-p5dz7o.html Millions of Australians will miss out on home ownership as the nation heads towards a long period of slow growth in household incomes, forcing more people to fall back on the age pension to pay for shelter. The trend will put growing pressure on the federal budget, as younger people struggle to get into the housing market, according to a new federal report that says income growth will halve over the next four decades....... Doh!!!
OPINION Why do people who produce nothing get rewarded the most? Waleed Aly Columnist, August 25, 2023 https://www.smh.com.au/national/in-...ng-get-rewarded-the-most-20230824-p5dz4w.html Intergenerational Report: “Structural changes to the economy are projected to put pressure on the revenue base over the coming decades”. That’s an extremely dull way of saying we have a massive tax problem. We’re about to get older – which means we require much more government spending on things like health care, aged care and the NDIS – and have no real way to pay for it. Even old favourites such as taxing petrol or cigarettes will fall short because electric cars are only going to get more popular, and tobacco tax revenue has already started falling. So, we’ll have to dream up some new taxes and expand some existing ones. We have spent years building a system that makes housing unaffordable.CREDIT:SIMON LETCH And we’ll have to do this amid a housing crisis. The current pain might feel like an acute moment, but it is really the culmination of decades of policy in which every factor has pulled in the direction of making housing unaffordable. Our tax system encourages us to take on large amounts of debt to accumulate investment properties, while we build houses too slowly to meet demand. Meanwhile, we seek more workers to fund expanding government spending. That’s hard in an ageing society where an ever smaller proportion of people work and pay tax. Hence, the imperative for us to have more babies, take in migrants or both. Accordingly, the housing crisis is not an adjunct to our tax problem: it’s at the core of it. People who can’t afford housing aren’t likely to rush into having kids. And adding migrants rapidly adds demand for housing, thereby making it immediately more expensive. A major problem here is that we rely far too much on collecting tax from workers. They pay twice as much overall tax as companies, for example, and enjoy relatively few tax breaks. At the same time, we give tax breaks to people who own investment properties and increase the demand for houses. You don’t have to believe property owners are all fat cats to think this is a problem. Indeed, many landlords are not particularly wealthy. But the issue here isn’t one of wealth so much as it is one of incentives. When we direct our tax concessions to property owners rather than workers, we make two significant, related statements: 1) having assets is better than working; and 2) passive income is better than income from productive activity. We’re used to talking about productivity when it comes to workers. Specifically, we hear that wage growth without a corresponding increase in productivity simply leads to inflation, and because Australia has a productivity problem at the moment, real wage growth is unrealistic. Why, then, doesn’t a similar idea apply to property investment? We encourage it, and our politics therefore requires property prices to keep increasing, but we never talk about whether this is productive. And in truth, there’s often very little that’s productive about it. If I buy a house, then rent it out and wait for its value to increase over time, what will I have actually produced? The house exists either way, someone lives in it either way, and it requires no real labour from me. Unless I’m ploughing significant money into renovation, maintenance is about the most productive thing I could say I’m doing. That’s different from other kinds of investment. Someone who puts money into a new business, or an old one planning to expand, is helping to produce something. Even someone who builds a new house, or takes a block of land and turns it into several dwellings, is doing something productive – so it makes perfect sense for them to get tax concessions such as negative gearing. What they are not doing, is simply taking ownership of a pre-existing and largely unchanging asset and hoping to profit passively from that fact. This is not some piercing, new analysis. The whole point is that it’s a basically conventional one. Since the late ’60s, economists have used the concept of “rent-seeking” to capture the economic harm that occurs when people seek to increase their wealth without doing anything to create new wealth for society. They often illustrate this with the extreme example of something like theft, or piracy. Thieves and pirates don’t produce anything themselves. They therefore create no new wealth, and simply take what already exists. In the process, those who actually do produce things (only to have them stolen) have less profit for their risk and effort, while the thief enjoys almost pure profit. If we didn’t provide serious disincentives for this – like imprisonment – we’d find over time that society would produce less, and what little it produced would become hugely expensive. So, the economic theory goes, we shouldn’t incentivise legal forms of rent-seeking either. We don’t want companies taking government money to do things they would do anyway. We don’t want our market distorted by powerful lobby groups who convince politicians to give them subsidies or put tariffs on competitors. If they succeed in this, they end up with greater market share, inequality increases, and consumers pay more. Sound familiar? If we’re going to have to rethink our tax system, rent-seeking seems a good place to start. Perhaps if we taxed productive profit less than its unproductive counterpart, we’d have the seedlings of a system better designed to meet what the Intergenerational Report warns us is coming. Of course, landlords are not typically considered rent-seekers in this technical sense. But there’s a case to be made that our tax system makes them so. Their tax concessions, such as on negative gearing and capital gains, are a kind of government subsidy maintained, in part, by a strong lobby group. That’s not a criticism of landlords or property investors, against whom I have nothing. But it is a criticism of the incentives that make most of us wish we were part of their cohort. Waleed Aly is a regular columnist.
John was the only bidder for an auction. He still had no chance By Kate Burke and Tawar Razaghi August 27, 2023 https://www.smh.com.au/property/new...n-he-still-had-no-chance-20230808-p5dutu.html Key points Home buyers are concerned about the prevalence of underquoting and the complaints process. The practice is illegal, and wastes the time and money of house hunters. Buyers and experts say more needs to be done to restore confidence in price guides. Home buyer John Slater was the only bidder on a northern beaches property last year, and he still missed out. Slater’s bid of $2.1 million was knocked back, and the Allambie Heights property passed in on a vendor bid of $2.5 million. Home buyer John Slater missed out on a northern beaches property, despite offering to pay above the price guide. Credit: Ben Sarcy The price guide had been $2.2 million, revised down from an initial $2.4 million. He increased his offer post-auction to $2.35 million, but was told the vendors wanted at least $2.5 million. He realised he never stood a chance. He even complained to NSW Fair Trading but was disappointed by the response. Sydney property buyers are raising concerns about the prevalence of underquoting, the complaints process, and laws that permit questionable behaviour. Quoting below what the property is worth or what the vendor is willing to sell for can attract more buyers, but leaves many frustrated to realise they wasted time and money on inspections and building reports for a property they could never afford. It can also be hard to prove, especially in rising markets, and a stronger-than-expected sales result is not necessarily underquoting. Underquoting means making a statement about a property price that is less than a real estate agent’s reasonable estimate of the property’s likely selling price. This estimate is recorded in the agency agreement between agent and seller and can be a single price or a 10 per cent range. The reserve – the price the owner is willing to sell for – can be set regardless of the estimated price. Neither figure has to be made public. A property does not have to be advertised with a price guide, but if it is, the guide must be based on factors such as recent comparable sales and market conditions, and be updated based on buyer feedback if needed. Sydney home buyers have become accustomed to adding sizeable sums onto advertised price guides for homes going to auction.Credit: Peter Rae Slater, a long-term northern beaches resident who temporarily relocated to Adelaide, spent thousands of dollars on flights, car hire, solicitors’ fees and pest and building reports, for a property for which he was never in the running. “When I went to Fair Trading, they said this is not underquoting because the property didn’t sell; it was almost like, ‘computer says no’,” he said. The property he missed out on never sold, and was withdrawn from the market. Underquoting is illegal and the laws were strengthened in 2016, but still contain loopholes. Agents face fines of up to $22,000 if successfully prosecuted and may also lose commission, but neither penalty has ever been imposed. Instead, agents have been issued penalty notices of $2200. The commission that agents stand to make varies, but an agent charging 2 per cent commission would earn $20,000 for selling a $1 million home. NSW Fair Trading has received 596 complaints about underquoting from 2019 to date, and has issued 348 fines off the back of complaints and compliance operations. Since January, 51 complaints and 43 penalty notices, totalling $94,600, have been issued. Dozens of Sydney buyers told this masthead they had no faith in price guides and were accustomed to adding sizable sums on top, some at the advice of agents who admitted a property should sell above their guide. Some buyers questioned how they could tell when a price guide was way off the mark, but experienced agents, with access to data, purportedly could not. Very few had lodged an official complaint, lacking faith in the process. A NSW Fair Trading spokesman said underquoting was monitored during general real estate checks and targeted operations, including inspections of sale records and undercover monitoring of campaigns. More than 180 inspections have been conducted since January. Reducing misleading representations by agents was a priority for Fair Trading, he added. All complaints were assessed carefully, and recorded to monitor future conduct, but could be finalised with no action if they could not be substantiated. Agents caught underquoting could be given educational advice, a warning, penalty notice or face prosecution. Fair Trading and Better Regulation Minister Anoulack Chanthivong was unavailable for an interview, but provided a statement saying it was a priority for Fair Trading, which had cracked down on misleading conduct and would continue to look at ways to improve. He declined to answer detailed questions but urged those who believe they had been misled to make a complaint. “It marks the agent for closer scrutiny in the future and along with spot checks it’s a critical part of helping to stamp out this unacceptable behaviour,” he said. Industry stalwart Henny Stier, principal buyer’s agent at OH Property Group, has made multiple complaints to Fair Trading about underquoting, but said they went nowhere. “There has not been a single investigation into anything that was complained about. It was such a futile exercise,” Stier said. OH Property Group’s Henny Stier has made multiple complaints about underquoting to Fair Trading to no avail.Credit: Dion Georgopoulos Agents who do the right thing are then left behind, she said, as they risk losing buyers to competitors who underquote. “Because of this, it’s become quite systemic,” she said. Stier said loopholes include agents not accepting offers before auction so they are not legally required to revise their price guides, using outdated comparable sales, or communicating verbally with buyers to avoid a paper trail. She was among more than two dozen buyer’s agents this masthead spoke to, most of whom felt underquoting was common. Few had complained, concerned it would sour a relationship with an agent, or result in nothing more than a slap on the wrist. Those who did were disappointed by Fair Trading’s response, some adding it was under-resourced. Buyer’s agent Lauren Goudy has previously complained about underquoting, but was disappointed by the outcome.Credit: Peter Braig When buyer’s agent Lauren Goudy, of Rose & Jones, presented a “cut-and-dried case” of underquoting to Fair Trading a number of years ago, she was disappointed. An agent had formally knocked back a client’s offer, but continued to advise buyers of a lower price guide. Sydney buyer’s agent Paul Mulligan believes underquoting is rampant.Credit: Peter Braig “[Fair Trading] said they just gave the agent a warning. There was no fine, there was nothing.” Buyer’s agent Paul Mulligan, founder of Mulligan Property Acquisitions has also made complaints, but to the best of his knowledge none resulted in a penalty. “They tell you they can’t say anything [about the outcome] because it’s an ongoing investigation and it could compromise their processes,” Mulligan said. “How to actually lodge a complaint [isn’t clear on] their website I went to, and was like, ‘How the f--- do you do this?’ If I can’t do this, what hope has the consumer got?” Mulligan believes underquoting is rampant, and the practice disadvantaged those agents who did quote honestly. On the selling side, Smyth Estate Agents director James Smyth has complained “more than a couple of times” about underquoting, which he said undermined the work of agents who tried to quote accurately. “I do see a lot of very cheeky guides that are quite misrepresentative,” he said. When Smyth has lodged complaints, he has been disappointed by the result. He said few buyers complained as they were busy or worried about getting an agent offside. Sydney first home buyer Carolien Waterman, who has been searching for some months, has not complained about inaccurate guides and questions how doing so would make a difference for a buyer who has missed out on the property and is looking for the next. First home buyer Carolien Waterman is sick of seeing agents underquote property prices.Credit: Ben Symons Waterman missed out on a one-bedroom apartment that was guided at $575,000 and sold for $721,000. “I would have rather ... spent my time in a productive way than going to an auction where you are already losing before it starts,” she said. Good Deeds Property Buyers founder Veronica Morgan decided against lodging a complaint, after she called Fair Trading about a “blatant” case of underquoting. Her clients made a pre-auction offer about $500,000 above the price guide for an Ashbury home, but were unsuccessful. Rather than knocking the bid back, and revising the guide, the agent said they could not accept pre-auction offers. Good Deeds Property Buyers founder Veronica Morgan called Fair Trading about a blatant case of underquoting, but got the strong impression it wouldn’t go anywhere.Credit: Louise Kennerley “[I called Fair Trading and] they talked me through the process and I decided not to complain. I got the strong impression it was going to go nowhere,” she said. Real Estate Institute of NSW chief executive Tim McKibbin said it was disappointing that some agents engaged in the illegal practice, but it was not as widespread as consumers believed. “[But] the current response to the problem clearly isn’t working. I think there needs to be a rethink of how we take this problem on, both from a compliance and perceptions perspective.” McKibbin said REINSW wanted to work with Fair Trading to lift industry standards and consumer confidence, but he said buyers should dedicate time and resources to do their own due diligence. How to make a complaint about underquoting Collect as much evidence as possible. Written records of price representations or any potential offers made on a property are ideal. Head to the Make a Complaint section on the Fair Trading website. Select the ‘Real estate, property management and strata’ option, and click through to the real estate and strata complaint form. Fill out the form, provide any relevant documentation or correspondence as evidence, and submit. You can also make your complaint by mail or you can call 13 32 20 to discuss how to make a complaint. NSW Property Services Commissioner John Minns, tasked with raising industry standards and improving Fair Trading’s regulatory powers, was not convinced underquoting was widespread. “From 51 complaints [this year], the likelihood is there’s probably only a handful of actual [cases] ... that’s not evidence of a rampant issue with underquoting,” he said. However, it was still an issue he took seriously, regularly meeting Fair Trading’s investigations and enforcement team. He did not want penalties seen as the cost of doing business but also noted investigators had to carefully weigh up the benefit for consumers of taking an agent to court. Opposition Fair Trading spokesman Tim James called for a review into the legislation that allows price guides and reserves to be set separately, and acknowledged buyers’ concerns around the current system, which the opposition set up, and Fair Trading’s ability to deal with the extent of underquoting. “Fair Trading needs to be very engaged and in touch with the market to be able to establish whether the present provisions are working. I certainly have a concern in relation to them,” James said. “When you’ve got obviously such a level of concern out there, I mean that warrants a review ... we’re not afraid to call for that.“
In a Sydney building, tenants happily pay higher rents. It’s a model that could become more common By Andrew Taylor August 27, 2023 https://www.smh.com.au/national/nsw...could-become-more-common-20230801-p5dt0d.html No rental bond. Pets are welcome. And the landlord is happy for tenants to paint walls, hang artwork or build shelves. Mirvac’s LIV Indigo at Sydney Olympic Park sounds too good to be true – especially in Sydney’s torrid property market, where tenants face skyrocketing rental prices, no-fault evictions and often put up with appalling living conditions because landlords refuse to repair problems. Thomas Pospieszny, with dog Joshie, and Nancy Chen are residents of Mirvac’s build-to-rent apartment complex at Sydney Olympic Park.Credit: James Brickwood But there’s a catch: tenants such as Nancy Chen and Thomas Pospieszny pay more than the median rent for the area. Chen pays $650 a week for her one-bedroom apartment, while Pospieszny pays $670 a week for his one-bedder in the build-to-rent apartment complex owned by property giant Mirvac. This compares with the median weekly rent of $550 for a one-bedroom apartment in Sydney Olympic Park, according to real estate website Domain. (Domain is majority owned by Nine, publisher of The Sun-Herald.) “It’s roughly around the same, but this place provides so much more,” Chen says. “Convenience and just being comfortable in my home is everything, because I like to stay in a place for a long time.” The experiences of Chen and Pospieszny are a far cry from horror stories such as the Sydney woman facing homelessness with her six-week-old baby after she fought a 60 per cent rent increase and asked for repairs. It’s little wonder that Australians do not want to rent long term: a 2018 HSBC survey found renters were not as happy in their accommodation as owner-occupiers, and a 2019 Housing Industry Association survey found 92 per cent of renters wanted to own their own home. The plight of renters is so bad that the Senate is holding an inquiry into the worsening rental crisis in Australia, while the NSW government is seeking to reform the state’s tenancy laws. Build-to-rent housing, where a developer constructs an apartment block and then holds and manages it, is long-established in Europe but a newcomer to Australia. Could it be part of the solution? Data from the Property Council of Australia shows build to rent properties make up just 0.2 per cent of Australia’s housing market compared with 5.4 per cent in Britain and 12 per cent in the US. However, the council’ NSW executive director, Katie Stevenson, says the federal government’s halving of the Managed Investment Trust withholding tax for Build-to-Rent to 15 per cent earlier this year could lead to up 150,000 new apartments over the next 10 years. “Build to rent has the potential to drastically improve the supply of quality rental properties and when supply goes up, rents go down because there are more option on the market,” she said. The latest figures from JLL Research show that nationally construction is set to increase next year. With 315 one-, two- and three-bedroom apartments, LIV Indigo is one of the first residential developments that Mirvac has built to rent out rather than sell apartments. Mirvac’s build-to-rent general manager, Angela Buckley, says the company sees a “significant market opportunity” in a new category of housing that is better for renters. “The customer experience is typically poor, with limited security of tenure,” Buckley says. “Whether people rent by choice or by necessity, they represent a large and growing market that needs reliable and good quality housing supply.” The NSW government introduced tax concessions and planning reforms in 2020 and 2021 to encourage new build-to-rent housing. The state significant development threshold for developers to bypass local councils and lodge build-to-rent plans with the Planning Department was lowered from $100 million to $50 million in Greater Sydney and $30 million elsewhere. There are 20 proposed build-to-rent developments in the planning system that, if approved, will provide more than 6600 new homes (Premier Chris Minns has warned that NSW will be “130,000 houses short within the next five years”). The NSW Land and Housing Corporation also has a $32 million project for build-to-rent social and affordable rental housing in North Parramatta. Property developers lobby group the Urban Development Institute of Australia called for further tax and regulatory reforms to encourage build-to-rent affordable housing in a 2022 policy paper, Driving Build to Rent. The institute’s NSW chief executive, Steve Mann, says build-to-rent properties are typically priced at rents up to 20 per cent above market rates “and the model will need high rent growth to recover ground on increasing yields”. “Build-to-rent is one piece of a larger puzzle,” he says. “It will help but won’t solve the housing crisis. Initial projects will invariably be targeted as premium products due to the high level of amenity and associated costs.” Besides Sydney Olympic Park, Mirvac has a build-to-rent property in Melbourne’s CBD and a 396-apartment development under construction in Brisbane’s Newstead that includes 99 homes for essential workers at an affordable rent subsidised by the Queensland government. Both Sydney and Melbourne build-to-rent properties have a health and wellness facility, cinema rooms, games room, coworking spaces and indoor pool and spa. “We provide onsite property maintenance and customer service via a simple app, all white goods included in each apartment and pets are welcome, and our residents can paint their walls and hang pictures,” Buckley says. Chen moved into a one-bedder in LIV Indigo after her landlord asked her to vacate her previous home in Burwood, where she had lived for nine years. “Being in the private rental market is quite stressful,” Chen says. “I had to worry about moving if they decided to sell or renovate.” Pospieszny has lived in the complex with dog Joshie since 2020 and moved to different-sized apartments in the building several times – with the assistance of the landlord. “We moved in and a lightbulb blew,” he says. “Within an hour of raising a request, I had a person come in to change it.” One of the one-bedroom living rooms in the LIV Indigo build-to-rent complex.Credit: Mirvac is not the only developer that says it will treat tenants better under existing laws than the current crop of amateur mum and dad landlords. Urban Property Group has about 250 build-to-rent homes in Penrith and Dulwich Hill, with plans for an additional 1500 units. Urban’s Navali development in Penrith has 21 apartments for NDIS and lower income tenants, whose rent is up to 75 per cent of the private market rate. The development is a partnership with community housing provider Link Wentworth. Urban’s chief executive, Patrick Elias, says the build-to-rent model provides residents with greater security of tenure. “As we’ve seen over the last year, a hot rental market can create significant challenges,” he says. “Too often this results in tenants having to pay significantly more to keep a rental property or moving to a new location at a time of huge demand.” The Navali build-to-rent project offers affordable housing but is unlikely to be the norm among the sector.Credit: Urban Property Group Committee for Sydney planning policy manager Estelle Grech says build-to-rent properties offer tenants greater certainty and security of tenure without the fear of surprise hikes in price: “In terms of design, you’re more likely to get high quality communal spaces, and a deliberate focus on building a sense of community.” Grech says the average developer building homes to sell had no reason to care about the long-term costs of living in and operating a building: “But when it’s a long-term institutional investor, sustainability and quality ratings are a priority to reduce ongoing maintenance costs.” Build-to-rent is not affordable housing, she says, “nor is it trying to be”. “But there’s nothing stopping government from partnering with developers in areas of high need to subsidise housing for key workers.” The 2022 research led by University of NSW’s City Futures Research Centre senior research fellow Chris Martin found there were about 11,800 build-to-rent units in Australia – mostly operated by Meriton. “It really says something about our current lot of landlords and property managers that the prospect of having a mega corporate landlord can sound like a good thing,” he says. But Martin says the overseas experience of large corporate landlords has not always been positive. “In some countries they don’t do a whole lot of building; they instead buy up existing stock,” he says. “There’s overseas evidence that they use eviction proceedings more frequently, and increase rents more aggressively.” While build-to-rent proponents talk up shared facilities such as terrace gardens and yoga rooms, Martin says, “they are also calling for design standards that would allow apartments that are smaller and less well-ventilated than are permitted now”. But other models – which trade off facilities for cheaper rent – are emerging. Not-for-profit property developer Nightingale Housing has partnered with Fresh Hope Communities to build studio-like apartments of up to 35 square metres in Marrickville that will be rented at below-market rates. Nightingale Marrickville comprises apartments it calls Teilhaus-style, which means “part of house” in German. They are more affordable because they do not have individual laundries, parking spaces or second bathrooms, says its chief executive, Dan McKenna. The Nightingale Marrickville development is being built under boarding house laws.Credit: Rhett Wyman The 54 apartments will be offered at 80 per cent of market rent in a ballot with an income cap – at least 20 per cent will be offered to key service workers, First Nations Australians, people with disability, carers and single women aged over 55. The project, approved under planning rules for boarding houses, is on a site owned by the Church of Christ in Marrickville. McKenna says there are structural barriers to delivering build-to-rent properties in a high-cost market such as Sydney that could be addressed: “This could be through more streamlined approval processes at a local government level, or assistance with financing and improved subsidies at a state and federal level.” Macquarie University research fellow Alistair Sisson says the greater security of tenure potentially offered by build-to-rent comes at a price. “This is partly because it’s new stock – and for apartments, new stock typically rents for a premium – and partly because it can offer more security than the conventional private rental,” he says. “It’s likely that it’ll continue to be a premium product while tenancies in the private rental sector remain as insecure as they are.” Mirvac’s LIV Munro build-to-rent project in the Melbourne CBD. The sector may always be priced at a premium.Credit: Justin McManus Moreover, Sisson says that even if renting becomes more secure overall, the rental yield that investors need to get a return from build-to-rent properties means they will most likely continue to be premium housing options. “Sydney’s, and Australia’s, housing market is probably not the most favourable to build-to-rent because of high prices and modest rental yields, with the real profits coming through capital gains when properties are sold,” he says. Sisson says build-to-rent could provide more social and affordable housing if governments pay for it. “It’s complicated to include social and affordable housing in conventional strata schemes due to the owners’ corporation structure,” he says. “Build-to-rent apartment complexes might be able to accommodate tenure mixes more easily if there are subsidies available.” Advocates of build-to-rent say it frees up stock further down the market – a process known as filtering – which indirectly generates more affordable housing, but Martin says this claim is not backed by evidence. “Properties do filter downmarket over time, but they are not accumulating as a stock of affordable dwellings,” he says. “They get spirited away into some other use before that happens e.g. owner-occupation, redevelopment.” The build-to-rent sector is also hamstrung by tax breaks that drive up housing prices, Martin says. “Australia’s small-holding landlords, their losses cushioned by negative gearing, have kept rental yields lower than build-to-rent businesses could stand.”