Picking on property investors may have nasty consequences

Singer Britney Spears and Australia’s two million-plus property investors have something in common amid proposed new rules.

Almost 16 years ago, a Britney Spears fan’s emotional plea for the world to “leave Britney alone!” attracted tens of millions of video views online and spawned many memes and parodies.

It was one of the world’s first viral videos, and today I will deliver my own emotional plea, and it won’t be anywhere near as popular.

Leave landlords alone! Imagine me saying this with tear-filled eyes and a face of anguish.

Australia’s 2.2 million real estate investors have been under fire lately, but those who liken all landlords to the devil should be careful what they wish for.

Rents have been surging across Australia, more than 25 per cent in some places, and some individual tenants have been hammered by even more than that. The greedy landlord tag may be an appropriate term for a few property investors who tried to cash in on soaring demand for rental accommodation by jacking up rents too high and booting out tenants who don’t pay up.

However, lumping landlords altogether is just like saying every renter is a tenant from hell who smashes walls and soils bedrooms.

Cara Cunningham, formerly Chris Crocker, achieved viral video fame in 2007 with the Leave Britney Alone clip.

The majority of property investors have a heart, and many have seen their investment loan repayments jump by almost 60 per cent since April 2022. Their property loans are often larger than a typical owner occupier’s mortgage, and interest is their biggest expense.

Taking drastic measures against landlords will produce drastic results.

One of the reasons that The Greens have decided to block the Albanese Government’s proposed $10 billion social housing fund is because Labor is refusing its demands for a nationwide freeze on rent rises.

The Greens’ policy calls for “a two-year emergency rent freeze”.

“This would be followed by ongoing rent caps and an end to no grounds evictions, minimum standards for rental properties and tenant rights to make minor improvements to the home,” it says. “Following the two-year rent freeze, rents would be capped at 2 per cent increases every 24 months.”

While The Greens may have their heart in the right place, their heads are in fairly land.

Every investor has a choice about where they put their money. If owning rental properties becomes too tough, such as being unable to recover at least some of their rising costs, they will simply sell up and put their money somewhere else such as the share market, infrastructure, listed real estate investment trusts or even overseas property.

That would make rental properties even tougher to find, squeezing the housing market further while Australia welcomes 200,000 migrants each year.

I’ve been a property investor for more than two decades, have spoken with many real estate specialists and interviewed countless landlords in that time.

My rent rises in the past year have been below 5 per cent despite interest costs leaping 50 per cent, and I like tenants owning pets because it means they are more likely to stay and save me re-letting costs.

Landlords are not all evil, and are feeling the rising cost of living too – often impacting multiple mortgages. The critics should be careful about calling for rent freezes, or there won’t be many properties to rent.