As part of the Father’s Day announcement around the gradual easing of COVID-19 restrictions across Victoria, the news that the State Government is extending its eviction ban and rental support offers until the end of March, 2021, is both positive and negative.
Good news for tenants
For tenants and renter advocacy organisations, the news is positive and offers a safety net for people whose income has been compromised as a direct result of the pandemic. For landlords and real estate agents, though, the announcement signals the longest eviction ban Australia has ever known and with private landlords unable to evict tenants until at least next April, there are concerns that this could lead to financial stress for existing property investors.
The Rent Fair amendments to the Residential Tenancies Act will also be delayed.
Extension of Eviction Ban Concerns Landlords
The introduction of the eviction ban was announced in the earliest days of the pandemic, in order to protect tenants from being evicted for non-payment of their rent, due to job losses caused by the impact of COVID-19. Initially, it was planned to cover a six-month period but was then extended to December 2020. Now, with the initiative extended yet again, the decision reflects the compounding issues facing many tenants, who have lost their jobs and income stream – with renters being over-represented in some of the most vulnerable economic sectors, including hospitality, retail and tourism.
But a recent media report showcased Real Estate Institute of Victoria president Leah Calnan saying that the extension of the moratorium had to be a careful “balancing act” between both tenants and landlords.
She said that leaving landlords without rent for months created a one-sided win, with many tenants not even attending the backlog of VCAT hearings which have sprung up as a result.
Vacant Rental Properties Soar in Melbourne
With the number of vacant rental properties in Melbourne soaring to unprecedented levels, new data reveals that revealing the number of empty rental properties is up by 140.7 per cent, compared to the same time in 2019.
The situation is made worse because of the impact of current stage four lockdown regulations, which makes in-person property inspections impossible – something that has made searching for and applying for rental properties challenging.
In other states and territories, though, the news is not as bleak, with rental markets in every other capital city performing better to create a steady national vacancy rate of 2.1 per cent.
With the roadmap out of the pandemic-related restrictions set to be gradual, experts predict it will be a challenging time for many existing investors, while those who are unaffected by job losses and income reductions could actually benefit, by snapping up property bargains that are sure to emerge throughout the remainder of 2020 and early-mid 2021.
To find out how you can secure a competitive interest rate for your next mortgage, talk to our team of professional home loan specialists at Lending Specialists.