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How Has Coronavirus Affected The Rental Market?

Media Distancing – Rental Market Snapshot – Fast Facts Covid-19 Vs Bluestone

Media Distancing:

  • We should be exercising media distancing when they continue to frequently and intentionally scaremonger and sugar-coat housing industry stories. Most people have a home, so the media know these stories get attention.

Fast facts on how COVID-19 has affected Bluestone tenancies:

  • Governments eager to appease announced that Tenants impacted by COVID-19 should request assistance from Landlords and both parties should come to a mutual agreement.
  • While many Tenants mentioned financial hardship due to COVID-19, only a couple of Landlords did, but we know many more are experiencing challenges due to these unprecedented times.
  • Media scaremongering triggered some seemingly unaffected Tenants to request reductions in rent on lease extensions.
  • Several Tenants expected Landlords to waiver portions of their rent, but we said numerous Landlords are in similar positions where they rely heavily on rent to pay Mortgages, Rates, Utility Connections and Land Tax and the Banks, Councils, Utility Providers and Government are only deferring owners payments.
  • We had between 75 and 80 Tenants mention hardship due to Covid-19.
  • 26 of these Tenants emailed us formalising their request for rent reductions with some requested up to 50% off.
  • Naturally, we notified the owners of these 26 properties.
  • To update affected Landlords and Tenants accordingly, we invested countless hours over many weeks researching and deciphering the information which was not only inconsistent but also frequently changing and regularly updated. Additionally, some info is ambiguous and open to interpretation, leaving industry professionals like us confused.
  • On the 22nd of April, the QLD Government made temporary reforms (COVID-19 Emergency Response) to the Residential Tenancies and Rooming Accommodation Regulation.
  • New forms were legislated; the two main forms are a Show-Cause Notice and a Variation Agreement. 
  • We send show-cause notices to Tenants in arrears who have mentioned hardship due to COVID-19.
  • The variation agreement is used to vary the rent on the lease contract and also establish any payment plan.
  • Our team designed Bluestones Covid-19 Tenant Hardship Application Forms so Landlords could make fair assessments of Tenants request for financial hardship. 
  • Only 2 Tenants were eligible for assistance under the QLD Gov’s temp Covid-19 temporary reforms. 
  • Please note that unless the Landlord and Tenant sign the new COVID-19 variation agreement:
    • The updated legislation still requires Tenants to continue meeting their financial obligations under the General Tenancy Agreement (Lease).
    • The Lease Tenants signed is a legally binding contract, so breaches to their financial obligations are legally enforceable.
    • If Tenants rent falls into arrears, the regulations require Bluestone to continue issuing arrears notifications, Notice to Remedy Breach (Form 11) and Notices to Leave (Form 12).

Do you know why the governments are pushing hard for Landlords and Tenants to work it out between themselves, and if they can’t, they are promoting the RTA’s dispute resolution conciliation service and QCAT hearings?

  • Other than keeping a roof over Tenants heads and Tenants in Landlords properties!
  • Because as we suspected you have a legally binding Contract (Lease) where the Tenant agrees to pay a stipulated amount of rent for a fixed term!
  • How do we know this? Because we couldn’t facilitate a rent renegotiation, we lodged for dispute resolution and conciliation with the RTA.
  • The RTA then called only to inform us that the RTA is not facilitating dispute resolutions or conciliating on COVID-19 rent disputes because there is a legally binding contract for Tenants to pay an agreed amount of rent to the owner. This info somewhat also confirms that QCAT can’t adjudicate on rents stipulated on Leases, which we also suspected.
  • The RTA added that the RTA and QCAT could only suggest owners and Tenants agree to a reduced amount with a payment plan to pay off the difference.
  • The RTA issued a ‘Notice Of Unresolved Dispute’ which is required to lodge for an urgent QCAT hearing.
  • The waiting time for urgent hearings at QCAT is 20 weeks +.

Rental Market Snapshot 

  • Some rents were prematurely renegotiated before the Government passed and released legislation protecting Landlords triggering a decrease in rents.
  • Under the Government’s temporary regulations, only a relatively small number of Tenants are eligible to renegotiate rents bringing the median rental price down. 
  • Naturally, some owners are worried about losing their Tenants, so offering or accepting reduced rents to retain Tenants further reducing median rents.  
  • International student numbers have virtually ceased decreasing demand.
  • A lot of short-term accommodation like Airbnb & hotels are already rented or advertised for long term occupation, increasing supply.
  • Supply is also rising because some Tenants are either sleeping on friends couches or mum and dads’ home on beds of nails. 
  • Despite many parents best efforts, some bunkers will take a while to give up the cheap room and board, reducing demand. 
  • Uncertainty within the market has caused vacancy rates to increase significantly. 
  • By 2021 (next Census) the number of renters is continuing to steadily rise with the Tenants expected to make up 40% of the Australian housing market.
  • Supply and demand ultimately dictate rental prices. The likely winners, in the long run, are Landlords.

With the situation continually changing, please do not rely on Bluestone to keep you updated. Ultimately it is your responsibility to keep yourself informed so you can make educated and well-informed decisions.

Image Credit and Source – https://www.michiganradio.org/post/auchters-art-lets-try-social-media-distancing

Bluestone Property Management & Sales is the real estate agent that savvy Investors use when renting out their rental property/properties in Brisbane Queensland (QLD). Why because Bluestone’s Property Managers maximise the rental yield and minimise the stress involved in managing their units, apartments, townhouse and houses. Additionally, Bluestones Property Management Fees (commission charges) provide excellent value for money, so if things aren’t stacking up with your current agency give the Team at Bluestone a call.

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