Rent hikes force tenants to ‘break lease’ as ‘sight unseen’ investors demand more
Cash-trapped tenants are being forced to ‘break lease’ ahead of substantial rent hikes, with incoming tenants warned to accept the hit to the hip pocket when the existing lease expires.
Property
Don't miss out on the headlines from Property. Followed categories will be added to My News.
Maxxed out tenants are being forced to ‘break lease’ ahead of substantial rent hikes, with incoming tenants warned to accept the hit to the hip pocket when the existing lease expires.
New analysis of current rental listings shows landlords and property managers are commanding hundreds of dollars more per week in some suburbs.
It comes as Queensland’s vacancy rate plummets to record lows, with industry sources revealing that some rogue property managers are wildly overquoting market value to entice new business, while some investors are demanding huge increases beyond inflation and rate rises.
Of the 8785 current rental listings on realestate.com.au, at least 114 mention ‘break lease’ in the listing description.
On the Gold Coast, where the vacancy rate is just 0.6 per cent, down from 3 per cent in the March quarter of 2020, a three-bedroom townhouse at Nerang is currently listed as a ‘break lease’ for $450 a week but that will soar to $530 a week from next month.
Tenants can break a lease for many reasons, from buying a home to financial hardship, but rising rents are expected to exacerbate the trend as cash-strapped tenants move out in the hope of finding something more affordable – a tough ask in the current market.
MORE NEWS: Contracts ‘crash’ as banks clamp down on lending in QLD
Buyers, sellers, renters: 16 QLD property veterans reveal what to expect next
Rental crisis: The crazy prices for a single room in QLD
Meanwhile, another house at Helensvale was recently listed for $1400 a week, but property records show that same property could be snapped up for just $950 a week back in July 2020.
That’s a mark-up of $450 in just two years.
In Brisbane, a ‘break lease’ at Bridgeman Downs will cost $660 a week for a four-bedroom house now, but will hit $780 a week from mid-October.
“The increased rent reflects a substantial increase in cost of insurance, rates, sewerage rates and mowing and hedging costs for the property,” according to the listing.
While in Morayfield, a four-bedroom house is available now for $400 a week, with that to increase to $500 a week from September 18. It was $370 a week in August 2019.
The vacancy rate in Brisbane is 0.6 per cent.
The latest SQM Research Rent Index found rent prices for all dwellings in Brisbane rose 20 per cent in the 12 months to June to $538.60, the highest it has ever been.
Meanwhile up north, a house at Bushland Beach, north of Townsville, is listed for $400 now, but that will rise $50 from September, while a modern house at Douglas will set you back $600 a week now but $650 from mid September.
There is no law around how much rent can be increased, but a tenant can take the matter to the Queensland Civil and Administrative Tribunal (QCAT) if they believe it is excessive.
Rent increases can only occur every six months, with a minimum of two months notice, according to REIQ.
A property managers commission is generally 7-12 per cent of the weekly rent.
Ray White Marsden principal Avi Khan, whose business oversees more than 1000 rental properties from Brisbane to Logan, said they were turning away 2-3 landlords a month who expected big rent increases without doing any maintenance.
“Around 70 per cent of all of the stock we sold during the boom was to interstate investors in Sydney and Melbourne who bought sight-unseen and they are now saying, Avi, my mortgage repayments have gone up $90 and I want $120-$150 more a week,” he said.
“Some are seeing that rents are rising and that there is not enough supply so they are taking advantage.
“Our job is to try and educate them about the benefits of keeping good tenants, and yes, there are some property managers telling them what they want to hear, but often those properties then sit vacant because ordinary people just can’t afford it.”
Further analysis of new listings and property records show that some rents have increased by several hundred dollars a week since 2020, with countless social media posts from Queenslanders desperate to find a place to live after their rent was substantially increased or their rental was listed for sale or sold.
A post by Tenants Queensland asked for feedback on rent price increases.
One poster said their rent had increased five times in three years, while another said their rent was about to jump by $140 a week.
And many complained that getting repairs done had become almost impossible.
“I’ve been told if I fix things myself my rent won’t go up then told if I do complain I will be kicked out,” one tenant said.
As it stands, there are already people and families living in cars, tents and caravan parks.
Others are forking out a fortune to stay in hotel rooms and Airbnb properties.
Real Estate Institute of Queensland CEO Antonia Mercorella said it was the rapid rise in rents that was catching tenants off guard.
“Not too long ago, some landlords were not seeing any increase in rents, and, in some places, rents went backwards,” she said, adding that some catch-up, catch up was needed.
“We are hearing of some lessors taking advantage of the strong demand and seeing much larger increases and while I recognise that’s creating a challenging market for renters, I would also say that is has, for many years, been very much a renters market.”
Q Shelter executive officer Fiona Caniglia said a co-ordinated and planned approach across all tiers of government, with co-operation from the private sector, was needed to address the housing crisis.
“There are a number of policy levers that need to be addressed now, like unlocking existing properties that are sitting vacant, and implementing a long-term plan now to provide various styles of housing to suit population growth and affordability.
“Homelessness is an anxiety for many demographics now, and we need an approach whereby even essential workers like police and nurses, and other key workers who are being priced out, can find and afford to live in their communities.”
Ms Caniglia added that the pressure on the already overheated social housing sector would only get worse as more people struggled to buy or rent.
A residential Tenancy Authority Queensland spokeswoman said rent increase disputes made up only a small percentage of complaints, but she urged tenants to make use of the agency’s median rents comparison tool.
For help with your rights as a renter called QSTARS on 1300 744 263.
For housing help, call the Homelessness Hotline on 1800 474 753
Or call or visit a Housing Service Centre: https://www.qld.gov.au/housing/public-community-housing/housing-service-centre
First look: New Coast shopping centre for surprise site
A long-empty site in a surprise location will be transformed into a retail showroom complex under fresh plans lodged with the council. FIND OUT WHERE
Revealed: How much rent you need to pay in every Qld suburb
Rents have increased again in 252 Queensland suburbs, reversing the brief downward trend recorded just three months ago. See how your suburb compares!