As Australia begins to get back to normal just a little bit, we’re pleased to report that the rental data for Geelong isn’t as scary as it was predicted to be. Last month’s data from the Real Estate Institute of Victoria reported that 2 bedroom units had a median rent of $330 per week across Geelong and this has not changed since December. 2 bedroom houses are also remaining at their median rent of $330 per week while 3 bedroom houses are back to a median rent of $380 per after touching $385 per week in the previous month’s data.
Geelong’s vacancy rate is now at 2.4% – a new high up from 2.2% last month.
That figure is surprising because during this time, our vacant properties have leased very well and very fast but that is probably due to our 3D tours that we have provided for all properties during the recent lock-down restrictions. In fact, many agents globally have praised the 3D technology that is available today. Matterport cameras, for example, were very quickly sold-out in the first two weeks of restrictions in Australia due to the demand for the technology.
COVID-19 certainly has brought with it some challenges and both the Federal and Victorian governments have done well to assist people where possible. JobKeeper from the Federal government is arguably the most significant help to those in trouble. In the world of renting, however, while direction has come from Canberra, the laws and help are coming from Spring Street. The “Coronavirus Rent Relief Grant” is one such measure which combines some rules and some funds.
This grant is worth about $80m and will provide payments of up to $2000 to tenants experiencing rental hardship but it is very involved.
Firstly, let’s define ‘rental hardship’. Hardship, in this instance, is when a tenant is spending more than 30% of their income on rent while earning less than $100,000pa and having less than $5000 in savings.
Tenant’s experiencing hardship are encouraged to talk to their property managers or landlords to try to negotiate an arrangement that can help them get through this time. Remembering that landlords – who are often regular people – may also have their own financial problems, this negotiation may not achieve a result. In that case, tenants can then contact Consumer Affairs Victoria to lodge the request. CAV will then start a process of mediation in the hope of succeeding where the initial negotiation failed.
If the CAV meditation also fails, CAV has the power to set the rental amount for the property. CAV will attempt to set the rent to be 30% of the tenants income including the $2000 grant.
As property managers, we are stuck in the middle of this situation where someone loses out and that someone is our client – the landlord, but on the plus side, we know that our tenants homes are secured during this tough time. The unfortunate flaw in this arrangement (in our opinion) is that the landlord’s financial situation is not taken into enough consideration which means that in the worst example, the landlord can’t make the mortgage payments which leads to bank repossession which will lead to the tenant eviction as soon as the crisis is over. However, we have heard plenty of stories where landlords can afford to help and have done so. We have even experienced landlords in our own portfolio offering to help even before the tenants ask and we’re not alone in this experience with similar stories all over Australia.
There’s no doubt that we are living in difficult times, and overall our lawmakers have done well to protect those most vulnerable, but the system isn’t perfect yet. The good news is that we are on the way out.