Western Australia’s peak real estate industry body has slammed a decision by the WA Government to extend the coronavirus eviction moratorium for residential properties, warning of a looming rental crisis with vacancy rates already at a record low.
The Real Estate Institute of Wester Australia pesident Damian Collins said extending the emergency period tenancy legislation for all residential properties made no economic sense and would ultimately lead to higher rental prices and a shortage of rental properties.
The laws ignored the needs of landlords and would make it even more difficult for renters to find a property, he said.
The backlash comes as Perth’s vacancy rate dropped from 2% to 1.3% in the past two months, according to REIWA.
Perth’s eviction moratorium and freeze on rent increase are set to stay in place for at least another six months. Picture: Getty
Last week, Commerce Minister John Quigley announced that the freeze on rent increases and some evictions would stay in place for another six months until 28 March, 2021.
Mr Quigley said while WA was entering a period of economic recovery, the threat of a second wave of COVID-19 was still real.
“For residential tenancies, low vacancy rates for rental properties have, and will continue to force rents to rise. This, together with the current unemployment rate, as well as changes to JobKeeper, means families may find themselves in financial hardship,” Mr Quigley said.
But Mr Collins said the WA Government had used the pandemic as an opportunity “to introduce rent control and meddle in the free market”.
“We already have a shortage of rental stock and reducing supply further by dissuading landlords will ultimately mean tenants will find it even harder to get a property,” he said.
He said instead of a blanket extension, criteria should have been added to the legislation so that only those impacted financially by COVID-19 received support.
“The McGowan Government’s short-sighted decision to extend the emergency period for all tenancies is making a difficult problem even worse,” Mr Collins said.
“Unfortunately, sitting tenants are unlikely to move or adjust household size as they are paying below market rents. In addition, we are seeing an influx of people trying to find a new rental property in a market with a very low vacancy rate.”
WA tenants are struggling to compete for homes with very low vacancy rates. Picture: www.realestate.com.au/rent
Steve Radi, director at Radi Estates – Inglewood, said the blanket policy was unfathomable given barely 1% of tenancies in WA were impacted by COVID-19.
“This policy is absolutely hypocritical. We are not interested in the politics of what is playing out one little bit at the moment. It’s simply garbage,” Mr Radi said.
“Owners are missing out on money after sticking by the market through five years of economic downturn; and now we have politicians playing politics with people’s money and their lives. Not to mention costing the country an insurmountable amount of lost taxes due to interfering with the free market forces.
“We have one landlord who is terminally ill. She’s got kids, she’s got financial commitments and needs to sell her own home and move back into one of her investment properties. Without going to court to get an order to give the tenant notice to vacate, she cannot ask them to move out until the end of the emergency period.”
Mr Radi said the move would further ostracise investors and was out of sync with government stimulus to boost the construction industry in the wake of the pandemic.
The extension to the eviction ban has be criticised as “out of sync” with the WA Government’s stimulus to boost the construction industry. Picture: Getty
“(Landlords) can’t do what they want to do with their properties in a free market, yet the government goes and throws out $20,000 to the building industry. They have totally overheated it and allowed them to increase prices for new homes incredibly. Where is the government’s intervention in the free market here? It is a complete double standard.
“That Building Bonus has absolutely been dwindled in the wind. I have sold land for significantly more in the last two months than what identical blocks have sold for in similar locations in May and June before the announcement.
“The policy is a blatant socialist intervention into the free market…If the government had the best interest of tenants and landlords at heart, they would have let the free market play its course.”
The post Fears extension to WA eviction moratorium will cause “rental crisis” appeared first on realestate.com.au.