‘Robber barons’: great landlord myth exposed
Startling new data has shed light on one of the primary drivers of soaring rents – and why landlords are being unfairly targeted.
One of the country’s top property analysts has blasted governments’ slow delivery of social housing amid a critical failing of the private landlord sector to provide affordable rental accommodation.
SuburbTrends director Kent Lardner said multiple levels of governments needed to concede that the current rental system wasn’t working.
His comments followed revelations that more than 40,000 rental homes in both NSW and Victoria were sold and turned to owner occupied housing.
The sales were mostly due to investors no longer being able to afford their repayments and the result was fewer rental homes at a time when more were needed to address staggering affordability issues.
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Mr Lardner said governments had scapegoated landlords for too long and needed to accept that they were not the main driver of soaring rents.
“Most investors are not the robber barons people portray them to be. Certain factions in politics would even say its greedy landlords who have been responsible for rent increases,” he said.
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“But if greedy landlords was the only reason rents are high you have to ask: why are these investors who are supposed to be rolling in cash selling?
“The reality is that there is a rent crisis because we haven’t built enough housing and some landlords are struggling. Many are underwater.”
Mr Lardner added that more social housing would need to be built because private landlords could not be expected to offer cheaper rent out of their own pockets – especially given how home prices remain.
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“You have to consider that even if someone is buying investment properties at those higher prices, it’s not going to translate into affordable rental housing,” he said.
“That’s unless the owner is prepared for a very low rental yield, which most aren’t.”
“We had the solution 40 to 50 years ago, which was social housing, but we turned our back on it. We have to accept is that the private landlord market has delivered us unaffordable housing. A very large proportion of society simply cannot afford homes.”
A further challenge for the pricier capitals was that new investors entering the market were buying in cheaper interstate markets and bypassing the big inner city suburbs where rental stock was most needed, Mr Lardner said.
“Most investors will seek out properties under $500,000. They like houses on big blocks with good yields. It’s not possible to get that in Sydney and Melbourne. Other markets are far more attractive.”
Originally published as ‘Robber barons’: great landlord myth exposed