Opinion
Struggling with rent? It’s time to speak up
Dominic Powell
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In Australia, almost exactly one third of us are renters, with the other two thirds owning homes either with or without a mortgage. Of that third who rent, approximately 60 per cent are aged 35 and under, a significant increase from the late 20th century when many people in this age bracket were homeowners.
A report from the Australian Institute of Health and Welfare says the rise in renting “has had a disproportionate impact on younger households”, a demographic who are also disproportionately affected by the current cost of living crisis. They’re axing their spending far more than older generations, partially due to – you guessed it – being renters instead of homeowners.
It can pay to speak up if you’re facing a rent hike.Credit: Aresna Villanueva
It’s easy to see why, with rents across Australia’s capital cities up 8.5 per cent compared to last year, with renters in Sydney now expected to cough up a median $770 a week ($589 in Melbourne) for the privilege of having a roof over their head.
What’s the problem?
Overlooking the myriad political, societal, and economic issues that have led to this scenario, one of the main issues renters run up against is the inherent rigidity in the market. Landlords/real estate agents set a price, and renters either accept it or deny it (and often offer to pay more just to secure a place).
Mortgage holders, on the other hand, can shop around, pitting lenders against each other to get better deals and trim costs. In extreme circumstances, they can even get their repayments put on hold or significantly reduced – options renters do not have.
What you can do about it
However, there are some options to try if you’re a renter getting slugged with rent hikes, though, as always, your mileage may vary:
- Ask: Communication between renters and real estate agents often feels very one-way, with agents dictating much of what goes on. But Ben Cording, lead lawyer at Tenants Victoria, says there’s nothing to stop you from writing a letter asking for a rent reduction, especially if you lose your job or your circumstances have otherwise changed. Cording says being honest about your situation can at least open the door to getting lower rents, but he warns it will likely be dependent on your landlord’s situation. “If your landlord has paid off their mortgage, then there’s a fair bit of flex. But when you’ve got a landlord and their mortgage is on the brink of defaulting, that’s a different game,” he says. “The challenge here is that in this market, renters are over a barrel.” Make sure you’ve researched rental prices in your area and calculate what a reasonable reduction would be. Cording says you’re also more likely to have success if you’ve been a long-term tenant who’s treated the property well, so keep that in mind. If you have been slugged with a rent increase though, it’s critical that you write to your landlord quickly, and get a prompt answer, as if you can’t resolve the matter amicably and do decide to resort to legal action, you only have 30 days to lodge a claim after receiving notice of the increase.
- Barter: Depending on your landlord/agent, Cording says he’s seen successful situations where tenants have secured lower rents when landlords have been unable to do repairs on the property. “There might be some repairs needed to the house, and the landlord is saying they can’t afford to fix them,” he says. “Sometimes, the way that people can reach an agreement here is by saying ‘if you reduce that rent, you don’t have to fix it’.”
- Fight: You also have a number of legal pathways available, which primarily exist in the form of rental tribunals in various states, though this only applies if you’ve recently been given a notice of rental increase from your landlord. You have 30 days to challenge the increase through the NCAT in NSW or through Consumer Affairs in Victoria, both of which have the power to fix your rents for 12 months if they deem the increase excessive. Leo Patterson Ross, CEO of the NSW Tenant’s Union, says renters shouldn’t be afraid to take their landlord to the tribunal. “Less than 1 in every 700 renters who received a rent increase in NSW challenged it at the NSW Civil and Administrative Tribunal over the last year, even though many more have the evidence needed to challenge it,” he says.
- Move: This comes last on the list as it’s the least practical or attractive option, but you may still be able to find cheaper rents elsewhere. Rents have started to come down, slightly, falling 0.5 per cent in May, the largest percentage monthly decline in more than four years. They’re expected to keep falling this year, so keep an eye on the market to see if you can jump ship to greener pastures.
Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.