In my experience, it's not the larger tyrannical investors that think they can wander into my backyard whenever they feel like it, or refuse to make urgent repairs because they don't have the capital to fix things when they break.
We have kept a good close relationship with out last 2 landlords, and the real estate agents, no problems at all, we have had direct contact with the owner, anything that needed to be done we discuss with him first, if I can fix, I fix it, if I need help, he comes and helps, or he arranges someone that can. It's been smooth sailing for us, and they have kept any inrease to a min - negotiate direct with owner - as they have wanted us to stay.
I've rented from all sorts of different landlords, but only the guy who owned just my house and his own thought he could let himself into my yard and pick fruit off my trees.
Look up some articles on institutional residential property investors in the US, you are so so wrong. You will long for the mum and dad investors again.
I'm the last person to support big business getting into anything, but the blunt reality is that most renters will take an indifferent corporate landlord that knows and adheres to the law, over Debbie and Warren who can't wrap their heads around the fact that the house they're renting out is now someone else's home.
Every option for renters in this country is shit, corporations are just a new and interesting type of shit.
Yup, in a moderately well regulated market a corporate landlord is going to be compliant and out of your hair.
Meanwhile unless regulation and enforcement reaches draconian levels “mum and pop” landlords are gonna cut every corner, break multiple laws and act like they still have active possession of the living space.
The amount of regulation required to keep businesses in check is way less than required to keep sole operators in check.
> The amount of regulation required to keep businesses in check is way less than required to keep sole operators in check.
Not my experience. Both can be as bad as the other. Had wonderful landlords who lived in apartment upstairs and worked for large companies that would push every boundary possible. From what I'm reading about the US market and large corporations buying up large number of houses, it is a bad thing for the average person who just wants to own their home. It's pushing prices up, so another factor in the housing crisis.
From what I can see there's no one solution to the housing crisis (purchasing or renting) it's going to take a long time, multiple avenues of attack and commitment from government (ha). So we're screwed.
Also, “mom and pop” landlords tend to be more discriminatory.
Big firms only care about the bottom line, but individual landlords are more likely to let racism and prejudice affect their judgment.
Controversial opinion, but it's mine - I'm happy to pay more to a landlord that does more for me. What really shits me is when I'm expected to pay a substantial sum more and don't even get the legislated minimum in return.
Which is why we need more protections in place, homes should only belong to people, not businesses.
Personally I think a limit of 3 homes per household is more then then fair, it's allows for a main residence, a holiday home and an investment property.
Well without it you would need to convince people to allow the government to handle all rentals and that's pretty hard to do.
Also note when I said more then fair. Never said it was necessary.
Idk why I'm interested in explaining. I guess so i can feel out my choice of words for the future?
Some amount of investment properties allow flexibility in the market.
1. Some people have no interest in living their best logical lives. And that's okay and valid. LOW COST Renting should be an option.
2. Renting allows flexibility in living conditions for less stable job situations.
3. Renting enables people to move to areas and sample the work/life situation before committing.
4. Trading properties would be muuuuch more difficult if everyone only had one. To sell your one home you would need to have another person ready to sell their one home, and you would need to agree with them. And then you would need to find a buyer.
5. 2-3 property maximums would increase rental competition. It's owners with 5++++++(and ljhooker scumbags) that drive up rental prices of highly livable areas.
Free market isn't evil. But the default needs to be a socialism security foundation with a free market accessory to drive flexibility and quick adjustments to conditions.
My parents live in the downstairs apartment (where I grew up) and rent out the upstairs floor of the house. Separate entrance, fire escape, utilities, etc. Literally mum and dad landlords.
Their bedroom was the original dining room of the house when it was built in 1935.
That’s nice.
The point is, calling private landlords ‘mum and dad investors’ paints such a homely picture doesn’t it. We all love our mum and dad, and if they want to hoard a bunch of houses, shouldn’t we let mum and dad? What if mum and dad want to land bank a house or two? Sure tax policies which favour “mum and dad” investors and encourages them to speculate further entrenches inequality and drives up the cost of housing, but it’s mum and dad! It’s not mum and dads fault their kids can’t buy property!
They’re not wealthy private landlords, they’re mummy and daddy!
My landlord from my university times once said, he would rather burn the house down than letting the state get it after his death. (he had no relatives)
That's... Kind of the point. You can't fix the market and have a bunch of landlords continuing to own their properties. People need to exit the market for things to balance out.
There's always going to be people to replace them as landlords, anyway.
Regional Victoria but my mother in law just sold their IP because of the land tax. Rent was dirt cheap and had hardly increased in years. Person who lived there had been there for a decade or more.
The person who lived there tried to come up with the money to buy it (260k) but couldn’t get a loan. It sold to someone else and now that person is back looking for a place in a market where rent is much higher.
Rents have risen 15-20% in Victoria in the last year... what are these mystery "taxes" that are costing landlords more than that? Or, let me guess, this is a right-wing beatup with no basis in reality?
They made an investment, investments carry risk. I guess they will just have to pull themselves up by their boot straps and sell one of their investment properties.
So my land tax on my IP went up by $900. If I increased the rent on my property by just $20pw, it'd cover this. I haven't done so because I own the property outright, so I just take the hit. Problem is other investors are spiking them up much higher than that when costs aren't high enough to accommodate it. They are just following the market trend which keeps going up rather than stabilizing, despite the fact that rates HAVE stabilized.
ikr. It's almost like it's the REIV and their media mates are lying through their teeth. But that can't be right. They're usually such honourable parasites on society
>making $3 or $4k a year more
So you've never owned a property before I'm guessing (that's not meant to be negative). extra 3-4k in revenue after increasing rent, not profit.
Interest rates have caused repayments to double in the last couple years, it's a lot more than 3-4k.
Land tax is going to be a good $1000 or more generally. Expenses have really shot up, I can understand people saying interest is a calculated risk (but so is a 12 month rental contract for a tenant) - but historically all the compliance checks, energy efficiency requirements, land tax etc weren't a thing when most people signed up for this and now it's been thrown on them. It's completely reasonable for these to be passed on, along with interest in my opinion provided it's in line with market.
Yeah not really... historically rent payments haven't been expected to cover the entire mortgage. That was an artifact of the era of extremely low interest rates that ended recently. I've got no idea how people thought that a scheme where all they had to do was take their tenants' money and hand (some of) it to the bank and 30 years later they own a house was in any way realistic or healthy for the economy.
News flash: buying an asset costs money.
> ...energy efficiency requirements
I call bullshit. What energy efficiency requirements? The only requirement in Victoria is "Rental homes in Victoria must have a fixed heater in the main living area with at least a 2-star energy rating."
As for the "compliance checks" I assume you mean the minimum rental standards, which is basically "house must have running water and no leaking roof"
Give them a break, they never would have become landlords if they'd known about all these wild socialist regulations about running water and roofs not leaking. So unfair!
Ah yeah, so you want to be a landlord and “provide housing” to renters, but you don’t want them to live in a safe or liveable home because that costs money which would otherwise go into your pocket for simply owning an asset. And why should renters get smoke alarms that are checked every 12 months? The privilege of some wanting landlords to pay and check smoke alarms in a house they rent!
I’m sure you would be against government regulating your drinking water and having water companies have to filter, and provide water to your household 24/7, because that’s just annoying expenses for the water companies.
Small government now!
I never said I had an issue with these, although land tax is a dick move in my opinion. The others are fair enough, but historically they weren't always an expense that came with being a landlord.
My perspective is if these are requirements then they can reasonably be factored into running costs and rent obviously.
The same goes for the guys who want to abolish negative gearing. Sure if that ends up advantageous whatever (I'm no economist), but you'd need to grandfather existing investment properties into the negative gearing arrangements or once again - rent hikes.
It would make no sense to invest in property and just ignore your expenses. But this isn't about sense, it's about landlords being bad lol.
You guys crack me up.
Hmmm sounds like the skyrocketing rental yields should more than cover the land tax…
Something about corporate media and not wanting to pay taxes I can’t quite put my finger on…
It's just the new fee under the covid repayment plan in the state budget. It's based on land value. Around $900 for most properties on top of the usual land tax.
> what are these mystery "taxes" that are costing landlords more than that?
Land tax increased 40% principally due to higher rates and lowering the exemption down to $50k (it was previously $300k) - similar to reducing the income free tax threshold.
https://www.holdingredlich.com/victorian-state-budget-2023-24-taxing-changes-to-land-tax-payroll-tax-stamp-duty
I mean, was it really hard for you to google this? How does this fucking idiotic shit get upvoted?
I know about the land tax dipshit, I also know that landlord's profits have increased way more than that thanks to rising rents. That's why I said
>what are these mystery "taxes" **that are costing landlords more than that?**
Try reading the comment you're replying to next time you dumb bootlick.
tbh I don't think its just got to due with increasing land tax & interest costs. Its increased everything. Landlords with IPs are not exempt from cost of living increases...they are subject to the same increase in costs across the board as tenants are. LLs on lower fixed interest rates (2.5% & under) that are triggering to the higher variable ones (6.5% or so) will see an increase of $1,500 per month, just on repayments alone. Then factor in higher costs for land tax, council rates & for Strata fees through hiked up insurance premiums (if they pay strata), and we haven't even touched on the every day stuff like groceries, transport, fuel, power etc...granted that the only differentiating factor for Vic vs other states is the Covid debt levy, which manifests itself as a higher rate of land tax relative to other states...but at the end of the day LLs are finding better value in selling up in Vic & re-investing in real estate in other states like WA & QLD as they get better bang for buck there.
Good summary. I also commented on this elsewhere. We have our own house rented out because of work placement (so we have to rent ourselves too). But tenants just think that everyone is some wealthy landlord. Think about the increased mortgage rates, council rates, insurance, other maintenance issues and on top of it now the ever increasing land tax to recover the Covid debt. Also, lack of housing and too many migrants, are all contributing to the increased rent. Some owners can’t afford it anymore and are forced to sell or move to Queensland, where conditions are better at the moment. Every time this happens, there is one less rental property. Supply and demand!
I find it funny because I suspect most of the people complaining have never owned a home. There are alot of costs associated that you wouldn't even think about prior to owning.
Then renting there is even more you have to worry about. Also find the wrong tenant and all those expenses triple.
I had bad tenants once and didn’t even know because the RE didn’t tell me. They were terrorising the neighbours, dealt drugs, broke into cars and ruined my place, nearly burnt it down. They stopped paying rent too so in the end I had to go with the police to get them out. Landlord’s insurance had to pick up the tab for the damages. But I was still out of pocket with the rent and expenses.
So when there are no landlords what where are you planning on living? Nothing to rent which means you can only move out of home when you can afford to buy your own place.
You realise that this is not a good thing for people who don’t own a home either, right? I swear, often times the left clearly does care more about hating group X than helping group Y.
"I need to live no more than 5km away from the city because that's where I'll be working, I need to be near parklands and good schools and my budget is 300pw for a 4 bedroom house. Any suburb recommendations?? Also I heard there's a rental crisis but it's not that bad right?"
I saw an American girl on tiktok that got a one year visa say rent is sooo cheap and easy in Melbourne I was like bullshit. She then mentioned in the comments that she had to live in a hostel for over a month because she couldn’t find a share house to live in. Normal for a happy go lucky traveler. But for the locals that’s called homelessness
God I WISH there were jobs for my career outside the city. There is no reason that every job for me is in the CBD. It could be remote tbh, but I like the office, but why not get an office in a cheaper place like Dandenong or Mulgrave or something haha,
Massive corporation I work for with money on real estate: guys I know we’ve cut every corner to make it so there is literally no upside to being in the office but you’re gonna need to come into the office for uhhhh reasons, office culture and such
They’ll sell the house to someone who is going to rent it, or to someone who will be moving out of a rental to live there.
That’s how it’s supposed to work right?
Exactly this! Like it or not, in order to rent, a landlord is required. Prices aren't going down, so what the hell do these naive people think will happen?
Thats not at all true. You just need to build more houses. It might be hard for you to grasp, but forcing landlords to sell is not the only way for houses to hit the market.
It’s almost like landlords should understand that there are usually costs involved in obtaining an asset. And that they shouldn’t be entirely paid by the renter (who sees none of the benefits).
Kinda hard to speak with chattering teeth renting an uninsulated house heading into winter. But hey, im sure your land lord is grateful you're paying 1-2k more per year in bills so they could save a one off 2k cost to actually insulate the house. Surely the market reflects this in the cost of providing an inferior service... Ha!
I’m danish and it gets much colder in Denmark, but as soon as you’re inside you’re good, the worst winters I’ve had has all been in Melbourne, huddled over an electric heater with 2 pairs of socks eating a bowl of soup in the crappiest rentals, we couldn’t make
It into a better flat because or wages sucked, I finally convinced my Aussie wife to try Denmark for a little bit, she more than doubled her pay on her first job offer and we instantly bought a flat. Melbourne is the greatest place but they do absolutely nothing to help their working class.
Do you conveniently happen to be a long lost cousin of queen Mary ? In seriousness I feel for you guys, I wish I could help, you deserve better leaders.
Lots of economically illiterate people here who don’t own a house. Even if the landlords sell at a loss - and I don’t believe in owning IPs as they are too illiquid - Joe and Jane renter still won’t be able to buy. It costs more to own than to rent initially.
600k loan on modest house @ 6% is 36k interest to the bank. Principal repayments another 20k. Maintenance and insurance and rates and refurb, maybe 5k a year. You tell me you rent for more than 61k per year? If you want house prices to fall 10% - and I really can’t be arsed if they do - it doesn’t get a whole lot more affordable, but many Joes will be outta work.
The neoclassical model says it’s a supply problem.
Correct. “Wealthy” renters (with a deposit saved and the means to support a mortgage) get to become owner-occupiers; “poor” renters get kicked out of their home and find rental prices going up (because the rental properties on the market are becoming scarcer).
Landlord here - 3 properties, 2 of which are grace-and-favour for our kids.
Third one is an investment property. The goosing up of the land tax costs us an additional +4k for the investment property. IN addition the SRO has hilariously over-valued the property by about %40, something we're fighting ATM.
The property was recently vacated (the tenant couple split, one going to country Vic, the other back to Sydney, I believe), and it appears during their tenancy the waterproof membrane in the bathroom has failed - $30k, which we will of course pay (not the tenant's fault, though we would have appreciated being told about it).
The Victorian tax slug really IS a serious deal. Of course (like every other landlord) we've had to pass it on to our tenants, but we didn't increase the rent above that, adsorbing both inflation and the level of rents rising in the area anyway.
We authorized the full deposit return within a week of their departure, as the place was in good condition when they left.
And, of course - we're the bad guys as we're landlords - and the property will be unoccupied for the next 3 months or so.. I can tell you now the rental market is high-risk and low return right now: we'd get better money just selling the fucking thing and keeping the money in the bank: something wife and I are seriously considering doing.
Ah - just fuck yourselves.
It’s good of you that you didn’t increase rent more than the cost of the tax, and didn’t profit from the housing crisis. It sets you apart from most people here. I know my rent went up far beyond the land tax applied to my rental in my run down 60s built apartment block. I wasn’t so lucky.
But the truth is that nobody in Australia these days is gonna thank you for doing something for others. That’s just not the kind of place this is, sadly. Perhaps it’s just a consequence of having so many people struggling to get by that nobody has capacity to look out for one another anymore?
You should do whatever is right for you and your family. Kindness in this environment won’t be returned.
This is not good, it will make renting harder. Less rentals is bad thing, it's not fair people living in the cars and parks, when only 3 years ago they had a rental home. This is not like Australia.
Housing costs money, apparently the cost to build a median houses (not land) is now $400K, $100K more than prepandemic. Someone has to pay, so the money has to come from someone, and the person who had the the money wants something in return (unless you simply going to tax those with the money more, but taxpayers vote).
Less landlords means less rentable properties. Great if you're in a position to buy, but if you're not and you're stuck being a tenant, you're about to be fucked in the wallet... Hard.
But the house getting bought by a renter buying their first home or a landlord buying an investment property won't have any effect on the number of rentable properties?
I'm not sure why I have to keep saying this, but not all property buyers are ex-renters.
The kids who are able to rely on the bank of mum and dad are one example, as are people moving from interstate or overseas who have sold their previous properties and have the capital and/or income to buy directly into the market.
If a landlord is buying from another landlord, they'll be wearing the cost of stamp duty and other expenses of transaction. They will need to get that money back from somewhere, and they'll do it with higher rents.
A few people at work are selling their investment property apartments to overseas residents who are buying them for their kids who are coming over to study. Which is really sad because tenants are getting displaced and it's not taking any existing renters out of the tenant pool.
It’s not a watertight argument there. These new people coming from home after growing uo, or from interstate or overseas, were going to come or move out of home anyway. They would either have to rent or buy a place to do this, in either case reducing the stock of housing available to renters, and pushing up house prices regardless.
Investors leaving the rental market will at least put downward pressure on housing prices, giving some renters more opportunity to become owners.
Of course, in the end additional supply of housing is the only solution to undersupply. Also, only the government can create social housing for those that work hard but earn lower incomes in current conditions. Sadly, all of our MPs love owning multiple rentals and aren’t about to reduce their incomes by solving the crisis.
The best we can do it seems is all of us everyone buy 6 investment properties each and then we can all get rich at the expense of the other!!
I feel for you mate - reading all the comments and replies, trying to convince people using logic and sense. Sadly reddit is often not the place to argue using logic or facts.
I think it's mostly that an awful lot of people are pinning their hopes/dreams on a wish that property prices will drop if landlords exit. They don't like being brought back to reality where instead of things improving, they're getting worse.
That's why they're clinging to what is little more than a glorified version of trickle-down economics like a drowning person... It's desperation and shattered dreams.
That’s the real sadness in all this.
The way we’re going, there’s going to be an entire generation priced out of owning their own home - until we learn to build and accept proper med/high density places, where people and families actually want to live…
> until we learn to build and accept proper med/high density places, where people and families actually want to live…
That and stop convincing ourselves that the only way to grow the economy is through massive population growth. Sure it appeals to lazy government, but it succeeds at a macro level only by failing all of us at an individual level.
Yep, the fact this simple and accurate statement gets so many downvotes and arguments shows how few people here grasp the economics of the situation. It's the same mindset that says inflation could be solved if the government just kept printing more money.
Can you explain how that works? If a landlord can’t afford their failed investment, they will sell it.. if there is no buyer they will be forced to drop the price - this benefits people looking to buy. Otherwise another landlord would buy it which would not reduce rental supply..
This is good for everyone except the landlord with a failed investment. Do you think investments should guarantee a return or something?
Isn’t the purpose of government to guarantee the investment returns of the wealthy though?
That is what they do each day, so it must their purpose m, right?
> an you explain how that works? If a landlord can’t afford their failed investment, they will sell it.. if there is no buyer they will be forced to drop the price - this benefits people looking to buy.
Your assumption is that the people looking to buy are the same people currently renting. The reality is plenty of people who are renting right now can't actually afford to buy because they don't have the savings or earning power to secure sufficient loaned money to make the purchase. On top of that, the seller won't cut their selling price that much, as there are still plenty of buyers out there who DO have the capital available to purchase.
What you're getting instead is essentially a new division formed. Those who can afford to buy are benefiting at the cost of those who can not.
> This is good for everyone except the landlord with a failed investment.
Not true, it is also bad for the unfortunate tenant who is now forced to move because buyers typically want vacant possession.
Every time a property changes hands, there's stamp duty to be paid. If a new landlord buys it, no matter what price it goes for the rent will be higher to cover the lump sum sent straight to the state government coffers. The only real winner here is the state government who is absolutely loving the revenue.
> Do you think investments should guarantee a return or something?
Absolutely not. But with the way things are going this harms far more than just the landlords. It forces a new division between the haves and have-nots, as I mentioned above.
I've already posted this in two other places just as an example:
The kids who are able to rely on the bank of mum and dad are one example, as are people moving from interstate or overseas who have sold their previous properties and have the capital and/or income to buy directly into the market.
If a landlord is buying from another landlord, they'll be wearing the cost of stamp duty and other expenses of transaction. They will need to get that money back from somewhere, and they'll do it with higher rents.
There’s always a buyer, there’s lots of wealthy people buying up homes, I know one guy who was a builder turned real estate mogul with 180 properties and everytime a house in an area he likes is for sale in the $750k-$1m range he buys it.
Homes don't just disappear, if one goes of the rental market then it should be because a someone moved in. Unfortunately at the moment due to a lack of restrictions on who can buy homes a lot go to businesses.
> No it means a reduction in aggregate demand, which lowers prices across the board
Except we don't have a reduction in aggregate demand. You'd get this if we weren't shoveling more people into our cities day by day, however that isn't the way the government is operating the country.
This situation isn't just starting, it has been happening for at least the last six months, probably longer. Which way have rents gone?
Lower prices was the wrong term. Less investors equates to less price pressure from investors. It doesn't account for other demand factors, but possibly accounts for a slower rise than what might otherwise have happened.
It also alters supply significantly. The costs of adding new supply are not reducing, but the potential ROI for an investor-builder simply aren't there. End result - no building takes place, no additional supply to meet ongoing demand.
There are a whole heap of factors involved in the investor market. It would for example be absolutely disastrous to eliminate stamp duty at this point in favour of an ongoing land tax because this would simply incentivise the property flipper and speculative property investment game. So instead of having rents getting puffed up, you'd have actual property prices getting puffed up by much bigger players instead. You'd have way fewer individual investors and a much smaller cohort of much more powerful and influential investors instead, who would gain significantly more control over property supply and pricing in the state, giving them even more ability to dictate price to the market as a whole.
You've got it wrong. The current investment model has utterly failed our society. We need to disincentivise multi property investors of all stripes and incentivise supply. Removing stamp duty removes impediments to selling.
It also removes impediments to buying. Which means speculative investors will love it, because they know if they buy up places and limit the supply, they can dictate the price they sell at to the market.
Ironically stamp duty is the thing preventing them from causing this sort of carnage in the market.
That makes no sense to me
Either:
a) another landlord buys it, or
b) a new owner occupier buys it, removing both one rental and one set of renters.
This has zero effect on net housing
How many times do I have to say it? Know what, I'm just going to paste from the other time I explained this to someone...
Not all property buyers are ex-renters.
> The kids who are able to rely on the bank of mum and dad are one example, as are people moving from interstate or overseas who have sold their previous properties and have the capital and/or income to buy directly into the market.
> If a landlord is buying from another landlord, they'll be wearing the cost of stamp duty and other expenses of transaction. They will need to get that money back from somewhere, and they'll do it with higher rents.
But those buyers would be buying anyway, or otherwise renting if they couldn’t buy.
Your argument still makes no sense in terms of net housing.
The only thing that legitimately impacts that is the actual number of houses.
> Less rental properties but more properties to buy = less rental properties required.
This is only the case if you have a static population. Victoria absolutely does NOT have a static population. Instead we're getting more arrivals by the day, and every single one of them needs a roof over their heads.
What do they even think this means? Less landlords means... more houses to buy? Literally don't even know how they pretend this is anything but good news
It's complicated. Second-hand home sales doesn't add more housing stock as it usually means eviction of the tenants.
In a time of acute rental shortages, you would want more captial to flow into new houses.
More houses to buy, at the expense of the people who are renting it right now.
They will have to vacate the property, and someone who can pay six figures for the deposit will end up taking it.
It's not so much of a problem if the person who buys it frees up a spot somewhere down the chain (e.g. moving out of a lower priced home, that a renter buys, therefore taking one renter out of the market). But as the other comment said, often it'll be people who were previously not in the buying or renting market at all...
It really is starting to seem like living at home and holding off paying rent for as long as possible is the only way to win the game.
This is how it is in the country I'm from (albeit more complex reasons as to why property is bazonkers). IMO that lack of independent living experience in the 20s is really not great for young peoples' character and that bleeds over into all aspects of society and politics. Risk-taking, value shaping, personal responsibility, confidence, etc.
But then, I moved here so I guess I obviously valued certain experiences and outcomes more. Anyway if it really becomes a culture shift in Australia across all ethnicities then it will be interesting to see the repercussions on Australia's society down the line.
When a house gets taken off the rental market to be sold, this happens:
1. Existing tenant(s) get evicted and have to compete to look for a rental, adding to the number of people looking for rentals
2. Property gets sold - but it’s **almost always not to an existing renter**. The vast majority of renters are in no position to even front the deposit for a property. Instead, it gets sold to somebody else (not foreigners - because they are only allowed to buy off plan and that itself is also subject to FIRB approval. Existing homes can only be sold to permanent residents or citizens).
3. Following from the previous point - The new buyer is often one that isn’t in the rental market - i.e. they aren’t competing with renters to look for rentals, and typically don't live in a rental. So it has zero effect of reducing the number of people looking for a rental. The typical profile of a new house buyer is one that is funded by their parents and moving out of their existing family home, or permanent residents using built up intergenerational family wealth to buy the house, or someone from interstate selling their previous property and buying one here. These are also the same people who are contributing to population growth. The only thing that can alleviate population growth is to build more houses. You can’t exactly stop migration into Victoria, or stop rich people from making babies and buying houses for their babies.
So yeah - it does not help alleviate the rental market.
Digression - why do I say in point #2 that when a landlord exits the market and the property gets sold - it's almost always not to an existing renter? TLDR - a first home buyer buying at the median Melbourne house price of $909k **needs to pay nearly $232k upfront - in cash**. Unless you have at least this much + savings to sustain mortgage repayments for 1 year + emergencies (e.g. medical), you wouldn't be looking to buy.
Keep in mind that the median house price in Melbourne ([as reported by REIV](https://reiv.com.au/market-insights/victorian-insights)) is currently around $909k - [well beyond the $750k threshold for any stamp duty concessions for FHBs](https://www.sro.vic.gov.au/first-home-owner/apply-first-home-buyer-duty-reduction). If I'm not mistaken, if a FHB is buying at the median price, the only benefit they'd get as a FHB from the Victorian government is the [Homebuyer fund (cutoff at $950k) - but you have to share your home's equity with the government](https://www.sro.vic.gov.au/homebuyer). There is also a scheme called the [First Home Super Saver (which is applied nationwide)](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/withdrawing-and-using-your-super/early-access-to-super/first-home-super-saver-scheme), but you'd only see the tax savings over the long term.
Anyway, assuming a house priced at $909k, the **stamp duty needed to be paid upfront is around $50k** [(using the VIC Stamp Duty calculator)](https://www.e-business.sro.vic.gov.au/calculators/land-transfer-duty). A **20% deposit** is also needed to avoid LMI - that's **$181,800 upfront** too. So **total upfront costs - $231,800** - which you have to pay out of your savings. That **does not include any conveyancing fees or other fees**. Then assuming you **loan 80%** of the purchase price, that's a **loan of $727,200**. When paid over **30 years** assuming a **fixed rate of 6%**, that is **$4,360 in monthly repayments** - using the [ANZ home loan repayments calculator](https://www.anz.com.au/personal/home-loans/calculators-tools/home-loan-repayment-calculator/).
Let's change it up a bit and use the median unit price instead, which is $633k. Then you'd be eligible for a whole bunch of concessions - so your stamp duty would be around $7200. With a 20% deposit to avoid LMI, you need $126,600 upfront. So **total upfront costs - $133,200**, excluding conveyancing and other fees. 80% loan = loan of $506,400. Paid over 30 years at a fixed rate of 6%, that's **$3,037 in monthly repayments.** So you'd still need quite a large amount of upfront cash.
It's only good for those who can afford to buy, most renters getting their home sold from under them probably aren't in a situation to buy at that short notice, and will then need to fight for even less rentals in the market.
I think the other side of the coin means
Less investors means less building of new homes, once ex rentals become PPOR, maybe new immigrants maybe not, there are less rentals available, tightening the market further
I don’t have the answers but I think we need more land releases to start
Mate the big companies building new houses and apartments already restrict supply heavily to keep the prices high so less investors doesn't actually change all that much to supply anyway.
Releasing more land also doesn't help because investors just bank it and do nothing with it to again, restrict supply.
Changes need to be made to stop land banking in totality so that the land actually has to get developed in a timely fashion.
> big companies building new houses and apartments already restrict supply heavily to keep the prices high
I am generally pro union but I often feel that this is the intention of the CFMEU as well - lobbying to restrict migration of skilled tradies and limiting licensing/apprenticeship opportunities to any international students studying a trade
Would be interesting to see what the average age posting here is. Average age of buying a first house in Australia is 35. People in their 20s expecting to buy a house whilst going through uni partying travelling the world are being sold a dream that very few achieve
And how many renters have over 120k on the sidelines as a 20% deposit to be able to at minimum purchase a 600k property? Even if the prices drop 20% in Victoria the average home will still be above 750k.
Massive own goal. Property investors increase rental stock, increased stock leads to lower rental prices. Less landlords = lower rental stock.
Rents will sky rockets as immigration demand for rental stock is going to continue to increase. Enjoy!
Yeah I don’t understand why anyone would think this is a good thing. I rented throughout my 20s, with friends and none of us would have been in a position to just go out and buy a house, so renting was a life saver. Less rentals is going to be a disaster.
Interest rates go up then rent goes up that amount x 2 at LEAST. Landlords wonder why renters are upset. Additional fact landlords are some of the biggest cry babies about additional fees EVER.
The problem is that rental income does not cover the mortgage in a lot of cases due to increased interest rates, if it was, landlords wouldn’t consider selling
So now there’s less rental properties.
Just cause some landlords have left doesn’t mean housing will become more affordable, just makes it harder to find a rental
Who do you think is buying the properties that the landlord is selling? It’s either another landlord (so same number of rentals) or a former renter becoming an owner (so one less rental, but one less household looking for a rental).
> It’s either another landlord (so same number of rentals)
It isn't. If it was, the net number of landlords wouldn't be decreasing. And even if it was a new landlord, there is only one outcome that would eventuate, namely higher rents. After all, the new owner would still be paying the increased land tax, and would have just copped a nice lump of stamp duty to pay off as well. Only way they could manage this if the previous landlord wasn't able to make it economically viable is for them to have an even higher rent.
> or a former renter becoming an owner (so one less rental, but one less household looking for a rental).
This doesn't decrease the price of renting. We've got a booming population thanks to government policy, so competition and demand is still there and not reducing, plus there is no incentive for investors to build investment (rental) properties if it isn't profitable... and irrespective of all that, there is a giant difference between paying rent every week and being able to secure enough capital through loans or earning to actually afford to buy the kind of place that you're currently renting. A lot of home loans calculate the maximum they're prepared to lend on the basis of the borrower's income, so unless you're bringing home megabucks in income, you won't be able to borrow all that much to buy in in the first place. On top of that, with the reduced number of rentable properties out there, the cost of renting and the competition to get a rental property will both have gone up, making saving to buy into the market even more impossible.
that;s the short term effect: it's neutral. But the market is not static: a steady increase in demand as population grows is met with a steady increase in new supply. If new supply is reduced prices go up. Landlords are selling, and the reasons why they are selling will also discourage new landlords from entering which means developers are less likely to risk their money building. It reduces the supply of new housing. It's a bad idea when the biggest problem is lack of supply. The state government is not stupid but it is in desperate need of revenue.
It;s because a property which is now too expensive to be a viable rental will be bought by an owner occupier. Hence, the property is no longer available to rent, and the current tenant is evicted.
The new owners were renters, so it means fewer renters too. If you ignore all the tenants being evicted so the property can be sold with vacant possession, it is neutral in the short term. So what;'s the big deal?
But if an existing landlord did the numbers and saw that the renting is not viable, potential investors who would have arrived to contribute new housing do the same maths and buy a laundromat instead (read this in the newspaper last week ... you can negatively gear commercial real estate too). So it reduces future supply. This is the concern that people have when they way such a policy reduces rental supply. Whether that makes sense to you or not I can not say, but it seems to me a credible argument.
What is really happening is that the investors that are choosing to continue to invest here are buying these properties. It's not going to FHB'ers or other owner-occupiers. These people are struggling to get loans anyway. It's going to those with the equity already available. SO fewer investors are owning a greater percentage of the properties in VIC.
And selling their investment homes, right? Right?
Yes! The smaller mum and dad investors are selling their homes, and the larger tyrannical investors are buying them up.
In my experience, it's not the larger tyrannical investors that think they can wander into my backyard whenever they feel like it, or refuse to make urgent repairs because they don't have the capital to fix things when they break.
Pretty sure our landlord has multiple properties / shares. He doesn't bother us we don't bother him and everyone's happy + almost no rental increases.
We have kept a good close relationship with out last 2 landlords, and the real estate agents, no problems at all, we have had direct contact with the owner, anything that needed to be done we discuss with him first, if I can fix, I fix it, if I need help, he comes and helps, or he arranges someone that can. It's been smooth sailing for us, and they have kept any inrease to a min - negotiate direct with owner - as they have wanted us to stay.
This is the way. Build a good relationship, be proactive and then hope (and suggest) there are no ridiculous increases.
I've rented from all sorts of different landlords, but only the guy who owned just my house and his own thought he could let himself into my yard and pick fruit off my trees.
Look up some articles on institutional residential property investors in the US, you are so so wrong. You will long for the mum and dad investors again.
I'm the last person to support big business getting into anything, but the blunt reality is that most renters will take an indifferent corporate landlord that knows and adheres to the law, over Debbie and Warren who can't wrap their heads around the fact that the house they're renting out is now someone else's home. Every option for renters in this country is shit, corporations are just a new and interesting type of shit.
Yup, in a moderately well regulated market a corporate landlord is going to be compliant and out of your hair. Meanwhile unless regulation and enforcement reaches draconian levels “mum and pop” landlords are gonna cut every corner, break multiple laws and act like they still have active possession of the living space. The amount of regulation required to keep businesses in check is way less than required to keep sole operators in check.
> The amount of regulation required to keep businesses in check is way less than required to keep sole operators in check. Not my experience. Both can be as bad as the other. Had wonderful landlords who lived in apartment upstairs and worked for large companies that would push every boundary possible. From what I'm reading about the US market and large corporations buying up large number of houses, it is a bad thing for the average person who just wants to own their home. It's pushing prices up, so another factor in the housing crisis. From what I can see there's no one solution to the housing crisis (purchasing or renting) it's going to take a long time, multiple avenues of attack and commitment from government (ha). So we're screwed.
Shazza and wazza are struggling with equity, tycoons know what they’re doing
We have better protections for basically everything than the US. You can't just make 1 to 1 comparisons.
Also, “mom and pop” landlords tend to be more discriminatory. Big firms only care about the bottom line, but individual landlords are more likely to let racism and prejudice affect their judgment.
Correct, but you will pay more for it.
Controversial opinion, but it's mine - I'm happy to pay more to a landlord that does more for me. What really shits me is when I'm expected to pay a substantial sum more and don't even get the legislated minimum in return.
That’s fair.
Which is why we need more protections in place, homes should only belong to people, not businesses. Personally I think a limit of 3 homes per household is more then then fair, it's allows for a main residence, a holiday home and an investment property.
Why is an investment property necessary?
Rentals facilitate the free movement of people!!!! If you want to move somewhere, should you have to buy a home every move?
Well without it you would need to convince people to allow the government to handle all rentals and that's pretty hard to do. Also note when I said more then fair. Never said it was necessary.
Why is a holiday home necessary? People with jobs who can afford to pay rent are homeless right now
Never said it was?
Idk why I'm interested in explaining. I guess so i can feel out my choice of words for the future? Some amount of investment properties allow flexibility in the market. 1. Some people have no interest in living their best logical lives. And that's okay and valid. LOW COST Renting should be an option. 2. Renting allows flexibility in living conditions for less stable job situations. 3. Renting enables people to move to areas and sample the work/life situation before committing. 4. Trading properties would be muuuuch more difficult if everyone only had one. To sell your one home you would need to have another person ready to sell their one home, and you would need to agree with them. And then you would need to find a buyer. 5. 2-3 property maximums would increase rental competition. It's owners with 5++++++(and ljhooker scumbags) that drive up rental prices of highly livable areas. Free market isn't evil. But the default needs to be a socialism security foundation with a free market accessory to drive flexibility and quick adjustments to conditions.
What’s a mum and dad investor? You know there are mum and dad renters and mum and dad first home buyers too.
https://www.domain.com.au/news/drop-the-talk-about-mum-and-dad-landlords-it-lets-property-investors-off-the-hook-1236054/?utm_source=facebook&utm_medium=cpc&utm_content=link-newsfeed&utm_campaign=c-all-autopromo
My parents live in the downstairs apartment (where I grew up) and rent out the upstairs floor of the house. Separate entrance, fire escape, utilities, etc. Literally mum and dad landlords. Their bedroom was the original dining room of the house when it was built in 1935.
That’s nice. The point is, calling private landlords ‘mum and dad investors’ paints such a homely picture doesn’t it. We all love our mum and dad, and if they want to hoard a bunch of houses, shouldn’t we let mum and dad? What if mum and dad want to land bank a house or two? Sure tax policies which favour “mum and dad” investors and encourages them to speculate further entrenches inequality and drives up the cost of housing, but it’s mum and dad! It’s not mum and dads fault their kids can’t buy property! They’re not wealthy private landlords, they’re mummy and daddy!
Fantastic, now a renter can have a chance at purchasing it.
Good luck to them. There's probably at least 100 other people looking to buy it.
Less demand should see a drop in property prices right? Right?
Have you not seen the flat prices in Vic compared to the rest of the country ? That Is the drop
Sounds like it was one of those rare “good policies” then.
My landlord from my university times once said, he would rather burn the house down than letting the state get it after his death. (he had no relatives)
That's... Kind of the point. You can't fix the market and have a bunch of landlords continuing to own their properties. People need to exit the market for things to balance out. There's always going to be people to replace them as landlords, anyway.
Regional Victoria but my mother in law just sold their IP because of the land tax. Rent was dirt cheap and had hardly increased in years. Person who lived there had been there for a decade or more. The person who lived there tried to come up with the money to buy it (260k) but couldn’t get a loan. It sold to someone else and now that person is back looking for a place in a market where rent is much higher.
Rents have risen 15-20% in Victoria in the last year... what are these mystery "taxes" that are costing landlords more than that? Or, let me guess, this is a right-wing beatup with no basis in reality?
They made an investment, investments carry risk. I guess they will just have to pull themselves up by their boot straps and sell one of their investment properties.
No risk if you can just keep raising rent to subsidise the increased land tax
Oooh you really pissed off the entitled parasites with this comment.
Part of an REIV gaslighting campaign to lower taxes while they reap record profits. Nothing to see here.
It’s exactly this.
Land tax has increased in Victoria. This is not a mystery.
So my land tax on my IP went up by $900. If I increased the rent on my property by just $20pw, it'd cover this. I haven't done so because I own the property outright, so I just take the hit. Problem is other investors are spiking them up much higher than that when costs aren't high enough to accommodate it. They are just following the market trend which keeps going up rather than stabilizing, despite the fact that rates HAVE stabilized.
It's a mystery how a \~$1k/year tax could force people to sell assets that are making $3 or $4k a year more now than they were a year ago...
Their interest repayments are probably up $20k
not to mention the growth in capital value of around 30 to 40k per year
ikr. It's almost like it's the REIV and their media mates are lying through their teeth. But that can't be right. They're usually such honourable parasites on society
>making $3 or $4k a year more So you've never owned a property before I'm guessing (that's not meant to be negative). extra 3-4k in revenue after increasing rent, not profit. Interest rates have caused repayments to double in the last couple years, it's a lot more than 3-4k. Land tax is going to be a good $1000 or more generally. Expenses have really shot up, I can understand people saying interest is a calculated risk (but so is a 12 month rental contract for a tenant) - but historically all the compliance checks, energy efficiency requirements, land tax etc weren't a thing when most people signed up for this and now it's been thrown on them. It's completely reasonable for these to be passed on, along with interest in my opinion provided it's in line with market.
Yeah not really... historically rent payments haven't been expected to cover the entire mortgage. That was an artifact of the era of extremely low interest rates that ended recently. I've got no idea how people thought that a scheme where all they had to do was take their tenants' money and hand (some of) it to the bank and 30 years later they own a house was in any way realistic or healthy for the economy. News flash: buying an asset costs money.
> ...energy efficiency requirements I call bullshit. What energy efficiency requirements? The only requirement in Victoria is "Rental homes in Victoria must have a fixed heater in the main living area with at least a 2-star energy rating." As for the "compliance checks" I assume you mean the minimum rental standards, which is basically "house must have running water and no leaking roof"
Give them a break, they never would have become landlords if they'd known about all these wild socialist regulations about running water and roofs not leaking. So unfair!
Ah yeah, so you want to be a landlord and “provide housing” to renters, but you don’t want them to live in a safe or liveable home because that costs money which would otherwise go into your pocket for simply owning an asset. And why should renters get smoke alarms that are checked every 12 months? The privilege of some wanting landlords to pay and check smoke alarms in a house they rent! I’m sure you would be against government regulating your drinking water and having water companies have to filter, and provide water to your household 24/7, because that’s just annoying expenses for the water companies. Small government now!
I never said I had an issue with these, although land tax is a dick move in my opinion. The others are fair enough, but historically they weren't always an expense that came with being a landlord. My perspective is if these are requirements then they can reasonably be factored into running costs and rent obviously. The same goes for the guys who want to abolish negative gearing. Sure if that ends up advantageous whatever (I'm no economist), but you'd need to grandfather existing investment properties into the negative gearing arrangements or once again - rent hikes. It would make no sense to invest in property and just ignore your expenses. But this isn't about sense, it's about landlords being bad lol. You guys crack me up.
Yep!
Hmmm sounds like the skyrocketing rental yields should more than cover the land tax… Something about corporate media and not wanting to pay taxes I can’t quite put my finger on…
It's just the new fee under the covid repayment plan in the state budget. It's based on land value. Around $900 for most properties on top of the usual land tax.
> what are these mystery "taxes" that are costing landlords more than that? Land tax increased 40% principally due to higher rates and lowering the exemption down to $50k (it was previously $300k) - similar to reducing the income free tax threshold. https://www.holdingredlich.com/victorian-state-budget-2023-24-taxing-changes-to-land-tax-payroll-tax-stamp-duty I mean, was it really hard for you to google this? How does this fucking idiotic shit get upvoted?
I know about the land tax dipshit, I also know that landlord's profits have increased way more than that thanks to rising rents. That's why I said >what are these mystery "taxes" **that are costing landlords more than that?** Try reading the comment you're replying to next time you dumb bootlick.
das ist gut, yah?
Sehr gut!
Die Miete ist zu hoch.
Du hast mich gefraght....
tbh I don't think its just got to due with increasing land tax & interest costs. Its increased everything. Landlords with IPs are not exempt from cost of living increases...they are subject to the same increase in costs across the board as tenants are. LLs on lower fixed interest rates (2.5% & under) that are triggering to the higher variable ones (6.5% or so) will see an increase of $1,500 per month, just on repayments alone. Then factor in higher costs for land tax, council rates & for Strata fees through hiked up insurance premiums (if they pay strata), and we haven't even touched on the every day stuff like groceries, transport, fuel, power etc...granted that the only differentiating factor for Vic vs other states is the Covid debt levy, which manifests itself as a higher rate of land tax relative to other states...but at the end of the day LLs are finding better value in selling up in Vic & re-investing in real estate in other states like WA & QLD as they get better bang for buck there.
Also don’t forget the new gas and electrical requirements. If a house need new gas appliances or requiring switchboards this is minimum $2k to $30k
Spot on. NCC changes due in June / July will increase cost of new homes on avg over $20k per home.
Good summary. I also commented on this elsewhere. We have our own house rented out because of work placement (so we have to rent ourselves too). But tenants just think that everyone is some wealthy landlord. Think about the increased mortgage rates, council rates, insurance, other maintenance issues and on top of it now the ever increasing land tax to recover the Covid debt. Also, lack of housing and too many migrants, are all contributing to the increased rent. Some owners can’t afford it anymore and are forced to sell or move to Queensland, where conditions are better at the moment. Every time this happens, there is one less rental property. Supply and demand!
I find it funny because I suspect most of the people complaining have never owned a home. There are alot of costs associated that you wouldn't even think about prior to owning. Then renting there is even more you have to worry about. Also find the wrong tenant and all those expenses triple.
I had bad tenants once and didn’t even know because the RE didn’t tell me. They were terrorising the neighbours, dealt drugs, broke into cars and ruined my place, nearly burnt it down. They stopped paying rent too so in the end I had to go with the police to get them out. Landlord’s insurance had to pick up the tab for the damages. But I was still out of pocket with the rent and expenses.
Oh the protected species of Victoria now leaving :(
The sooner we get rid of all landlords the better
Exclude the owner occupiers with one property to live in.
So when there are no landlords what where are you planning on living? Nothing to rent which means you can only move out of home when you can afford to buy your own place.
Lol tall poppy syndrome
I mean considering the source is Channel 7, it’s probably also a total lie
You realise that this is not a good thing for people who don’t own a home either, right? I swear, often times the left clearly does care more about hating group X than helping group Y.
Next reddit post is gonna be "my landlord is selling and I have to move in 30 days and I have nowhere to go because 80000 people at every inspection"
Carefully spaced between the posts of "I'm about to move to Melbourne, where can I live?"
"I need to live no more than 5km away from the city because that's where I'll be working, I need to be near parklands and good schools and my budget is 300pw for a 4 bedroom house. Any suburb recommendations?? Also I heard there's a rental crisis but it's not that bad right?"
I saw an American girl on tiktok that got a one year visa say rent is sooo cheap and easy in Melbourne I was like bullshit. She then mentioned in the comments that she had to live in a hostel for over a month because she couldn’t find a share house to live in. Normal for a happy go lucky traveler. But for the locals that’s called homelessness
As long as you don't need a toilet, warm water or a front door; it's not that bad.
This sounds solvable by being able to work away from the city
God I WISH there were jobs for my career outside the city. There is no reason that every job for me is in the CBD. It could be remote tbh, but I like the office, but why not get an office in a cheaper place like Dandenong or Mulgrave or something haha,
Massive corporation I work for with money on real estate: guys I know we’ve cut every corner to make it so there is literally no upside to being in the office but you’re gonna need to come into the office for uhhhh reasons, office culture and such
Team up ?
Bingo!
They’ll sell the house to someone who is going to rent it, or to someone who will be moving out of a rental to live there. That’s how it’s supposed to work right?
Exactly this! Like it or not, in order to rent, a landlord is required. Prices aren't going down, so what the hell do these naive people think will happen?
Don’t bother. People here are economically illiterate.
You forgot something though. In order for a family to own their own home, one less landlord is required.
Thats not at all true. You just need to build more houses. It might be hard for you to grasp, but forcing landlords to sell is not the only way for houses to hit the market.
Classic fixed mindset. Reddit is a joke.
It’s almost like landlords should understand that there are usually costs involved in obtaining an asset. And that they shouldn’t be entirely paid by the renter (who sees none of the benefits).
Exactly
First they came for the landlords - and I said nothing.
Then they came for the politicians and I still said nothing, then they came for the rich and I said nothing, then all was well in the world
I said "bon appetit!"
Kinda hard to speak with chattering teeth renting an uninsulated house heading into winter. But hey, im sure your land lord is grateful you're paying 1-2k more per year in bills so they could save a one off 2k cost to actually insulate the house. Surely the market reflects this in the cost of providing an inferior service... Ha!
I’m danish and it gets much colder in Denmark, but as soon as you’re inside you’re good, the worst winters I’ve had has all been in Melbourne, huddled over an electric heater with 2 pairs of socks eating a bowl of soup in the crappiest rentals, we couldn’t make It into a better flat because or wages sucked, I finally convinced my Aussie wife to try Denmark for a little bit, she more than doubled her pay on her first job offer and we instantly bought a flat. Melbourne is the greatest place but they do absolutely nothing to help their working class.
Does Denmark take in refugees from Melbourne? Life getting really hard here…
Do you conveniently happen to be a long lost cousin of queen Mary ? In seriousness I feel for you guys, I wish I could help, you deserve better leaders.
Lots of economically illiterate people here who don’t own a house. Even if the landlords sell at a loss - and I don’t believe in owning IPs as they are too illiquid - Joe and Jane renter still won’t be able to buy. It costs more to own than to rent initially. 600k loan on modest house @ 6% is 36k interest to the bank. Principal repayments another 20k. Maintenance and insurance and rates and refurb, maybe 5k a year. You tell me you rent for more than 61k per year? If you want house prices to fall 10% - and I really can’t be arsed if they do - it doesn’t get a whole lot more affordable, but many Joes will be outta work. The neoclassical model says it’s a supply problem.
I’m sorry but I can only upvote you one time
The new dacia sandero
What this really means = higher rents
Finally someone that gets supply and demand
Not bad for people who have a deposit together and can buy. Bad for people without a deposit and can’t buy.
Correct. “Wealthy” renters (with a deposit saved and the means to support a mortgage) get to become owner-occupiers; “poor” renters get kicked out of their home and find rental prices going up (because the rental properties on the market are becoming scarcer).
Landlord here - 3 properties, 2 of which are grace-and-favour for our kids. Third one is an investment property. The goosing up of the land tax costs us an additional +4k for the investment property. IN addition the SRO has hilariously over-valued the property by about %40, something we're fighting ATM. The property was recently vacated (the tenant couple split, one going to country Vic, the other back to Sydney, I believe), and it appears during their tenancy the waterproof membrane in the bathroom has failed - $30k, which we will of course pay (not the tenant's fault, though we would have appreciated being told about it). The Victorian tax slug really IS a serious deal. Of course (like every other landlord) we've had to pass it on to our tenants, but we didn't increase the rent above that, adsorbing both inflation and the level of rents rising in the area anyway. We authorized the full deposit return within a week of their departure, as the place was in good condition when they left. And, of course - we're the bad guys as we're landlords - and the property will be unoccupied for the next 3 months or so.. I can tell you now the rental market is high-risk and low return right now: we'd get better money just selling the fucking thing and keeping the money in the bank: something wife and I are seriously considering doing. Ah - just fuck yourselves.
It’s good of you that you didn’t increase rent more than the cost of the tax, and didn’t profit from the housing crisis. It sets you apart from most people here. I know my rent went up far beyond the land tax applied to my rental in my run down 60s built apartment block. I wasn’t so lucky. But the truth is that nobody in Australia these days is gonna thank you for doing something for others. That’s just not the kind of place this is, sadly. Perhaps it’s just a consequence of having so many people struggling to get by that nobody has capacity to look out for one another anymore? You should do whatever is right for you and your family. Kindness in this environment won’t be returned.
Dacia Sandero has been delayed
The socialistic comments in here are sickening. If there are no landlords, who will you rent from? Muppets
This is not good, it will make renting harder. Less rentals is bad thing, it's not fair people living in the cars and parks, when only 3 years ago they had a rental home. This is not like Australia.
Get build-to-rent going then y’all renters can pay 20% extra to big corporations
Housing costs money, apparently the cost to build a median houses (not land) is now $400K, $100K more than prepandemic. Someone has to pay, so the money has to come from someone, and the person who had the the money wants something in return (unless you simply going to tax those with the money more, but taxpayers vote).
Less landlords means less rentable properties. Great if you're in a position to buy, but if you're not and you're stuck being a tenant, you're about to be fucked in the wallet... Hard.
But the house getting bought by a renter buying their first home or a landlord buying an investment property won't have any effect on the number of rentable properties?
I'm not sure why I have to keep saying this, but not all property buyers are ex-renters. The kids who are able to rely on the bank of mum and dad are one example, as are people moving from interstate or overseas who have sold their previous properties and have the capital and/or income to buy directly into the market. If a landlord is buying from another landlord, they'll be wearing the cost of stamp duty and other expenses of transaction. They will need to get that money back from somewhere, and they'll do it with higher rents.
A few people at work are selling their investment property apartments to overseas residents who are buying them for their kids who are coming over to study. Which is really sad because tenants are getting displaced and it's not taking any existing renters out of the tenant pool.
It’s not a watertight argument there. These new people coming from home after growing uo, or from interstate or overseas, were going to come or move out of home anyway. They would either have to rent or buy a place to do this, in either case reducing the stock of housing available to renters, and pushing up house prices regardless. Investors leaving the rental market will at least put downward pressure on housing prices, giving some renters more opportunity to become owners. Of course, in the end additional supply of housing is the only solution to undersupply. Also, only the government can create social housing for those that work hard but earn lower incomes in current conditions. Sadly, all of our MPs love owning multiple rentals and aren’t about to reduce their incomes by solving the crisis. The best we can do it seems is all of us everyone buy 6 investment properties each and then we can all get rich at the expense of the other!!
I feel for you mate - reading all the comments and replies, trying to convince people using logic and sense. Sadly reddit is often not the place to argue using logic or facts.
I think it's mostly that an awful lot of people are pinning their hopes/dreams on a wish that property prices will drop if landlords exit. They don't like being brought back to reality where instead of things improving, they're getting worse. That's why they're clinging to what is little more than a glorified version of trickle-down economics like a drowning person... It's desperation and shattered dreams.
That’s the real sadness in all this. The way we’re going, there’s going to be an entire generation priced out of owning their own home - until we learn to build and accept proper med/high density places, where people and families actually want to live…
> until we learn to build and accept proper med/high density places, where people and families actually want to live… That and stop convincing ourselves that the only way to grow the economy is through massive population growth. Sure it appeals to lazy government, but it succeeds at a macro level only by failing all of us at an individual level.
Exactly… BuT wE hAvEnT hAd A rEcEsSiOn In 20+ YeArS (While real incomes have been going backwards for the last decade or so)
Yep, the fact this simple and accurate statement gets so many downvotes and arguments shows how few people here grasp the economics of the situation. It's the same mindset that says inflation could be solved if the government just kept printing more money.
Can you explain how that works? If a landlord can’t afford their failed investment, they will sell it.. if there is no buyer they will be forced to drop the price - this benefits people looking to buy. Otherwise another landlord would buy it which would not reduce rental supply.. This is good for everyone except the landlord with a failed investment. Do you think investments should guarantee a return or something?
Houses are not dropping in price - heaps of houses selling - just taking a little bit longer on market than 5 years ago but still selling
Isn’t the purpose of government to guarantee the investment returns of the wealthy though? That is what they do each day, so it must their purpose m, right?
> an you explain how that works? If a landlord can’t afford their failed investment, they will sell it.. if there is no buyer they will be forced to drop the price - this benefits people looking to buy. Your assumption is that the people looking to buy are the same people currently renting. The reality is plenty of people who are renting right now can't actually afford to buy because they don't have the savings or earning power to secure sufficient loaned money to make the purchase. On top of that, the seller won't cut their selling price that much, as there are still plenty of buyers out there who DO have the capital available to purchase. What you're getting instead is essentially a new division formed. Those who can afford to buy are benefiting at the cost of those who can not. > This is good for everyone except the landlord with a failed investment. Not true, it is also bad for the unfortunate tenant who is now forced to move because buyers typically want vacant possession. Every time a property changes hands, there's stamp duty to be paid. If a new landlord buys it, no matter what price it goes for the rent will be higher to cover the lump sum sent straight to the state government coffers. The only real winner here is the state government who is absolutely loving the revenue. > Do you think investments should guarantee a return or something? Absolutely not. But with the way things are going this harms far more than just the landlords. It forces a new division between the haves and have-nots, as I mentioned above.
> Your assumption is that the people looking to buy are the same people currently renting. Who are the buyers then?
I've already posted this in two other places just as an example: The kids who are able to rely on the bank of mum and dad are one example, as are people moving from interstate or overseas who have sold their previous properties and have the capital and/or income to buy directly into the market. If a landlord is buying from another landlord, they'll be wearing the cost of stamp duty and other expenses of transaction. They will need to get that money back from somewhere, and they'll do it with higher rents.
There’s always a buyer, there’s lots of wealthy people buying up homes, I know one guy who was a builder turned real estate mogul with 180 properties and everytime a house in an area he likes is for sale in the $750k-$1m range he buys it.
Presumably to rent out right?
Yeah, and because he has employees managing his portfolio it’s at a higher cost to the renter.
Homes don't just disappear, if one goes of the rental market then it should be because a someone moved in. Unfortunately at the moment due to a lack of restrictions on who can buy homes a lot go to businesses.
Correct. More landlords selling out means less rental properties if the new owner is staying in the new property.
No it means a reduction in aggregate demand, which lowers prices across the board
> No it means a reduction in aggregate demand, which lowers prices across the board Except we don't have a reduction in aggregate demand. You'd get this if we weren't shoveling more people into our cities day by day, however that isn't the way the government is operating the country. This situation isn't just starting, it has been happening for at least the last six months, probably longer. Which way have rents gone?
Lower prices was the wrong term. Less investors equates to less price pressure from investors. It doesn't account for other demand factors, but possibly accounts for a slower rise than what might otherwise have happened.
It also alters supply significantly. The costs of adding new supply are not reducing, but the potential ROI for an investor-builder simply aren't there. End result - no building takes place, no additional supply to meet ongoing demand. There are a whole heap of factors involved in the investor market. It would for example be absolutely disastrous to eliminate stamp duty at this point in favour of an ongoing land tax because this would simply incentivise the property flipper and speculative property investment game. So instead of having rents getting puffed up, you'd have actual property prices getting puffed up by much bigger players instead. You'd have way fewer individual investors and a much smaller cohort of much more powerful and influential investors instead, who would gain significantly more control over property supply and pricing in the state, giving them even more ability to dictate price to the market as a whole.
You've got it wrong. The current investment model has utterly failed our society. We need to disincentivise multi property investors of all stripes and incentivise supply. Removing stamp duty removes impediments to selling.
It also removes impediments to buying. Which means speculative investors will love it, because they know if they buy up places and limit the supply, they can dictate the price they sell at to the market. Ironically stamp duty is the thing preventing them from causing this sort of carnage in the market.
"disincentivise multi property owners"
Just keep stamp duty for everyone who owns more than one property
How so?
The lower the number of bidders, the lower the upwards price pressure.
That makes no sense to me Either: a) another landlord buys it, or b) a new owner occupier buys it, removing both one rental and one set of renters. This has zero effect on net housing
How many times do I have to say it? Know what, I'm just going to paste from the other time I explained this to someone... Not all property buyers are ex-renters. > The kids who are able to rely on the bank of mum and dad are one example, as are people moving from interstate or overseas who have sold their previous properties and have the capital and/or income to buy directly into the market. > If a landlord is buying from another landlord, they'll be wearing the cost of stamp duty and other expenses of transaction. They will need to get that money back from somewhere, and they'll do it with higher rents.
But those buyers would be buying anyway, or otherwise renting if they couldn’t buy. Your argument still makes no sense in terms of net housing. The only thing that legitimately impacts that is the actual number of houses.
Less rental properties but more properties to buy = less rental properties required.
> Less rental properties but more properties to buy = less rental properties required. This is only the case if you have a static population. Victoria absolutely does NOT have a static population. Instead we're getting more arrivals by the day, and every single one of them needs a roof over their heads.
Technically ever 2.7 of them require a house on current trends. But yes, population is the biggest driver of housing prices.
Absolutely not true.
Serious question though is landlord are getting out won’t the pool of available rentals get smaller?
Stop with the common sense questions. In this sub they think all renters can buy immediately, it is just the evil landlords stopping them.
They are desperate to make out like everyone is leaving Melbourne / Victoria when the complete opposite is true 😂
With no landlords come no houses.
I would not buy a rental property only to then have some entitled person demand and whinge. Go buy your own property
What do they even think this means? Less landlords means... more houses to buy? Literally don't even know how they pretend this is anything but good news
It's complicated. Second-hand home sales doesn't add more housing stock as it usually means eviction of the tenants. In a time of acute rental shortages, you would want more captial to flow into new houses.
And that's where the focus should be. Encourage investment in new housing stock and discourage investment in existing stock.
Increasing land taxes in Victoria will not encourage investment in new housing stock.
More houses to buy, at the expense of the people who are renting it right now. They will have to vacate the property, and someone who can pay six figures for the deposit will end up taking it.
It's not so much of a problem if the person who buys it frees up a spot somewhere down the chain (e.g. moving out of a lower priced home, that a renter buys, therefore taking one renter out of the market). But as the other comment said, often it'll be people who were previously not in the buying or renting market at all... It really is starting to seem like living at home and holding off paying rent for as long as possible is the only way to win the game. This is how it is in the country I'm from (albeit more complex reasons as to why property is bazonkers). IMO that lack of independent living experience in the 20s is really not great for young peoples' character and that bleeds over into all aspects of society and politics. Risk-taking, value shaping, personal responsibility, confidence, etc. But then, I moved here so I guess I obviously valued certain experiences and outcomes more. Anyway if it really becomes a culture shift in Australia across all ethnicities then it will be interesting to see the repercussions on Australia's society down the line.
When a house gets taken off the rental market to be sold, this happens: 1. Existing tenant(s) get evicted and have to compete to look for a rental, adding to the number of people looking for rentals 2. Property gets sold - but it’s **almost always not to an existing renter**. The vast majority of renters are in no position to even front the deposit for a property. Instead, it gets sold to somebody else (not foreigners - because they are only allowed to buy off plan and that itself is also subject to FIRB approval. Existing homes can only be sold to permanent residents or citizens). 3. Following from the previous point - The new buyer is often one that isn’t in the rental market - i.e. they aren’t competing with renters to look for rentals, and typically don't live in a rental. So it has zero effect of reducing the number of people looking for a rental. The typical profile of a new house buyer is one that is funded by their parents and moving out of their existing family home, or permanent residents using built up intergenerational family wealth to buy the house, or someone from interstate selling their previous property and buying one here. These are also the same people who are contributing to population growth. The only thing that can alleviate population growth is to build more houses. You can’t exactly stop migration into Victoria, or stop rich people from making babies and buying houses for their babies. So yeah - it does not help alleviate the rental market. Digression - why do I say in point #2 that when a landlord exits the market and the property gets sold - it's almost always not to an existing renter? TLDR - a first home buyer buying at the median Melbourne house price of $909k **needs to pay nearly $232k upfront - in cash**. Unless you have at least this much + savings to sustain mortgage repayments for 1 year + emergencies (e.g. medical), you wouldn't be looking to buy. Keep in mind that the median house price in Melbourne ([as reported by REIV](https://reiv.com.au/market-insights/victorian-insights)) is currently around $909k - [well beyond the $750k threshold for any stamp duty concessions for FHBs](https://www.sro.vic.gov.au/first-home-owner/apply-first-home-buyer-duty-reduction). If I'm not mistaken, if a FHB is buying at the median price, the only benefit they'd get as a FHB from the Victorian government is the [Homebuyer fund (cutoff at $950k) - but you have to share your home's equity with the government](https://www.sro.vic.gov.au/homebuyer). There is also a scheme called the [First Home Super Saver (which is applied nationwide)](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/withdrawing-and-using-your-super/early-access-to-super/first-home-super-saver-scheme), but you'd only see the tax savings over the long term. Anyway, assuming a house priced at $909k, the **stamp duty needed to be paid upfront is around $50k** [(using the VIC Stamp Duty calculator)](https://www.e-business.sro.vic.gov.au/calculators/land-transfer-duty). A **20% deposit** is also needed to avoid LMI - that's **$181,800 upfront** too. So **total upfront costs - $231,800** - which you have to pay out of your savings. That **does not include any conveyancing fees or other fees**. Then assuming you **loan 80%** of the purchase price, that's a **loan of $727,200**. When paid over **30 years** assuming a **fixed rate of 6%**, that is **$4,360 in monthly repayments** - using the [ANZ home loan repayments calculator](https://www.anz.com.au/personal/home-loans/calculators-tools/home-loan-repayment-calculator/). Let's change it up a bit and use the median unit price instead, which is $633k. Then you'd be eligible for a whole bunch of concessions - so your stamp duty would be around $7200. With a 20% deposit to avoid LMI, you need $126,600 upfront. So **total upfront costs - $133,200**, excluding conveyancing and other fees. 80% loan = loan of $506,400. Paid over 30 years at a fixed rate of 6%, that's **$3,037 in monthly repayments.** So you'd still need quite a large amount of upfront cash.
It's only good for those who can afford to buy, most renters getting their home sold from under them probably aren't in a situation to buy at that short notice, and will then need to fight for even less rentals in the market.
Unless you can’t afford to buy. People who rent will be fighting it out for less rentals. Anything but good. Watch those rents rise.
I think the other side of the coin means Less investors means less building of new homes, once ex rentals become PPOR, maybe new immigrants maybe not, there are less rentals available, tightening the market further I don’t have the answers but I think we need more land releases to start
Mate the big companies building new houses and apartments already restrict supply heavily to keep the prices high so less investors doesn't actually change all that much to supply anyway. Releasing more land also doesn't help because investors just bank it and do nothing with it to again, restrict supply. Changes need to be made to stop land banking in totality so that the land actually has to get developed in a timely fashion.
> big companies building new houses and apartments already restrict supply heavily to keep the prices high I am generally pro union but I often feel that this is the intention of the CFMEU as well - lobbying to restrict migration of skilled tradies and limiting licensing/apprenticeship opportunities to any international students studying a trade
So there are just unowned homes now? Wtf does this headline even mean?
Would be interesting to see what the average age posting here is. Average age of buying a first house in Australia is 35. People in their 20s expecting to buy a house whilst going through uni partying travelling the world are being sold a dream that very few achieve
And how many renters have over 120k on the sidelines as a 20% deposit to be able to at minimum purchase a 600k property? Even if the prices drop 20% in Victoria the average home will still be above 750k. Massive own goal. Property investors increase rental stock, increased stock leads to lower rental prices. Less landlords = lower rental stock. Rents will sky rockets as immigration demand for rental stock is going to continue to increase. Enjoy!
Yeah I don’t understand why anyone would think this is a good thing. I rented throughout my 20s, with friends and none of us would have been in a position to just go out and buy a house, so renting was a life saver. Less rentals is going to be a disaster.
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i am landlord, downvotes please
Not all - I’m not. Sorry to spoil it for you.
Mark my words, everyone will crave the good old days after all the landlords sell up to immigrants who can afford homes.
This is utter rubbish just seems like another hit piece that is politically motivated.
Just do a Mao lol
Victoria is a lost cause
Interest rates go up then rent goes up that amount x 2 at LEAST. Landlords wonder why renters are upset. Additional fact landlords are some of the biggest cry babies about additional fees EVER.
The problem is that rental income does not cover the mortgage in a lot of cases due to increased interest rates, if it was, landlords wouldn’t consider selling
Happy to bitch about poor people getting government handouts but would be inciting riots if capital gains tax was in danger
So now there’s less rental properties. Just cause some landlords have left doesn’t mean housing will become more affordable, just makes it harder to find a rental
Who do you think is buying the properties that the landlord is selling? It’s either another landlord (so same number of rentals) or a former renter becoming an owner (so one less rental, but one less household looking for a rental).
> It’s either another landlord (so same number of rentals) It isn't. If it was, the net number of landlords wouldn't be decreasing. And even if it was a new landlord, there is only one outcome that would eventuate, namely higher rents. After all, the new owner would still be paying the increased land tax, and would have just copped a nice lump of stamp duty to pay off as well. Only way they could manage this if the previous landlord wasn't able to make it economically viable is for them to have an even higher rent. > or a former renter becoming an owner (so one less rental, but one less household looking for a rental). This doesn't decrease the price of renting. We've got a booming population thanks to government policy, so competition and demand is still there and not reducing, plus there is no incentive for investors to build investment (rental) properties if it isn't profitable... and irrespective of all that, there is a giant difference between paying rent every week and being able to secure enough capital through loans or earning to actually afford to buy the kind of place that you're currently renting. A lot of home loans calculate the maximum they're prepared to lend on the basis of the borrower's income, so unless you're bringing home megabucks in income, you won't be able to borrow all that much to buy in in the first place. On top of that, with the reduced number of rentable properties out there, the cost of renting and the competition to get a rental property will both have gone up, making saving to buy into the market even more impossible.
that;s the short term effect: it's neutral. But the market is not static: a steady increase in demand as population grows is met with a steady increase in new supply. If new supply is reduced prices go up. Landlords are selling, and the reasons why they are selling will also discourage new landlords from entering which means developers are less likely to risk their money building. It reduces the supply of new housing. It's a bad idea when the biggest problem is lack of supply. The state government is not stupid but it is in desperate need of revenue.
People rent because their circumstances or finances don’t allow them to buy a house. This doesn’t change that.
Why would there be less rentals? They're not taking the properties with them
Assumption is the house is purchased by someone who is not going to rent the property out, but also wasn’t someone waiting on a rental property.
It;s because a property which is now too expensive to be a viable rental will be bought by an owner occupier. Hence, the property is no longer available to rent, and the current tenant is evicted. The new owners were renters, so it means fewer renters too. If you ignore all the tenants being evicted so the property can be sold with vacant possession, it is neutral in the short term. So what;'s the big deal? But if an existing landlord did the numbers and saw that the renting is not viable, potential investors who would have arrived to contribute new housing do the same maths and buy a laundromat instead (read this in the newspaper last week ... you can negatively gear commercial real estate too). So it reduces future supply. This is the concern that people have when they way such a policy reduces rental supply. Whether that makes sense to you or not I can not say, but it seems to me a credible argument.
What is really happening is that the investors that are choosing to continue to invest here are buying these properties. It's not going to FHB'ers or other owner-occupiers. These people are struggling to get loans anyway. It's going to those with the equity already available. SO fewer investors are owning a greater percentage of the properties in VIC.
Huh?
First, they came for the landlords, and I said nothing, for they are landlords
Property investors businesses plan = someone will pay for it, YOLO.
It's funny, I read the opposite yesterday "Rent's are higher than ever"