Labor Government and Rental Crisis

What is the preferred vacancy rate before I invest there?

The present rental crisis is predominantly a result of investor inactivity over recent years due to government rhetoric and or banks not lending to investors!

time to take responsibility for where we find ourselves as a nation in rental crisis mode

Vacancy Rates

Based on the past history and rhetoric of the Labor Government, we firmly place the current rental crisis firmly in their lap and they need to step up and be accountable to find a solution to stimulate the rental pool and ensure that there are sufficient rental properties on the market.

Past rhetoric to garner votes has educated the have nots into believing that a property investor (a fellow human who wants to better themselves) is the daemon and using our ever famous ‘tall poppy syndrome’ they view property investors as greedy, blood sucking people using the government to get rich.

How far from the truth this is, but when you tell a fib often enough it becomes someone elses reality and belief!

I call on our Government to step up, rise above the noise and apologise because they have been a massive player in ensuring a Rental Crisis.

Now, those that believed the government and turned on investors are the very ones who are paying the heavy price of high rentals. The government rhetoric about abolishing Negative Gearing frightened investors and rightfully too. When they started espousing this, we wrote a blog that if they do this then rents will increase to cover what an investor will lose which is inflationary. And the other side of the coin is an investor would look to sell off the property if they couldn’t negative gear as it would become a loss to them. That means less rental properties on the market for tenants. Supply drops, demand stays the same or increases and boom = inflationary rental yields result.

At the very same time, the past Government tried to influence property price growth and encouraged banks to stop lending to investors. BOOM another drastic mistake as for the past 5 years, the population continued to grow, yet less rental properties were being built to accommodate a rising demand. Inflationary!

“The demonisation of property investors seems to be a national sport in Australia when more than 70 per cent of investors own just one property, hoping to simply improve their financial situation in retirement,”

the government won’t help so we need to help ourselves

Investors greedy or a vital cog in the accommodation crisis?

I read an excellent quote “Rather than continuing to view investors as ‘greedy’ or an endless source of funds for government coffers, perhaps it is time to recognise that they also provide rental housing for millions of Australians. How true, and we know that Government simply cannot fill this role, so why continue to batter or look for ways to secure more funds from those who are wanting to improve on their own life by taking a personal risk of building a rental property someone else desperately needs?

Home Ownership slips further away

On the back of rising interest rates, ones ability to borrow sufficiently, increasing build costs, increasing land costs, length of time required to build a home, banks rating on how little they will lend you, property valuations and more … it has never been a more difficult time for an owner to be able to afford a place to call home.

Median House prices have escalated dramatically and although they may slow down, we do not believe they will crash. If you wait, it seems you will be paying more for the same thing in a year or two. High median prices has made it tougher for home buyers to get into the market and this has just been further exacerbated by a rise in interest rates and the banks risk calculator on how much/little they will now lend you.

The gap keeps widening!

What this means is that those who want to buy a home to live in, are unable to afford where they want and deserve to live, and thus be ‘forced’ to continue to be Renters.

The problem is a lack of Rental Properties and a whole lot of competition, which has emanated into higher rental yields, and the circle spins around again with zero sign of abating.

Now remains a time for investors to put their hands up and build another rental property to help alleviate a crisis whilst earning sound yields and capital growth potential on their investment.

Read further on Vacancy Rates here

This Post Has One Comment

Leave a Reply