A state by state landlord's guide to rent increases
This article was first published on Your Mortgage.
House rents have continued to soar in almost every part of Australia, hitting a high of $471 per week nationally, up 4% from March last year when the pandemic began, the latest figures from real estate firm Domain has revealed.
Perth registered the biggest year-on-year increase among capital cities at 14.7%, with median rents reaching $430 – the highest since 2015. Darwin came in close second, with median house rents topping $550, a 14.6% jump from March 2020, according to the Domain Rent Report March Quarter 2021.
Only Melbourne, which endured the toughest coronavirus lockdowns last year, posted a decline, making it on track to become the cheapest capital city to rent a house in the country.
As for units, the cost of renting has dropped significantly with the national median falling to 2013 levels at $429 per week, an 8.1% year-on-year slide.
The decline was driven by significant decreases in asking rents in the country’s two largest cities – Sydney and Melbourne – where year-on-year figures plunged 9.6% and 12.8%, respectively.
Here’s a breakdown of Australia’s median asking rents, according to the Domain’s latest rent report.
|Capital city||Median house rent||YoY||Median unit rent||YoY|
Source: Domain Rent Report, March Quarter 2021
An update on each state’s emergency tenancy law
Domain’s report comes as Australia transitions out of the COVID-19 emergency period and moratoriums come to an end.
It must be remembered that when the COVID-19 pandemic first struck, the federal and state governments moved fast to implement various measures to protect both landlords and tenants, aware that upcoming lockdowns would deal a huge blow to most people’s ability to meet housing expenses. Among these measures was a six-month ban on evictions and rent increases, which commenced in April, but was extended to varying periods by several states to give the rental property market more time to stabilise.
Here’s what each state and territory is doing to support landlords and tenants during this transition period as gathered by rental property website Rent.com.au.
New South Wales
NSW has implemented a six-month transitional period where COVID-19-impacted tenants who accrued rent arrears between 15 April 2020 and 26 March 2021 will not be subjected to the standard tenancy eviction rules for those arrears. NSW Fair Trading will also assist tenants and landlords with negotiating repayment plans for arrears accrued during the moratorium period.
From 29 March 2021, rental laws have changed, which include a ban on rent bidding. Rental providers can no longer give a “no reason” notice to vacate as well.
Queensland has extended some COVID-19 arrangements for residential tenancies to 30 April. These apply to all general tenancies and rooming accommodation, including social housing. The arrangements include:
WA has extended the Residential Rent Relief Grant Scheme (RRRGS) – a $2,000 grant for struggling tenants facing rent increases greater than the normal market rate of 5% a year.
SA has put the following measures in place until 31 May:
The COVID-19 Rent Relief Fund and Landlord Support Fund will continue to provide up to $2,000 or four weeks rent per fund to eligible tenants and landlords. Additional support will also be available from 1 April and 30 June.
No new support measures are in place in NT. Tenants are encouraged to have open discussions with their landlords.
Australian Capital Territory
ACT has measures in place to support tenants and landlords as the territory transitions out of the moratorium. These include:
What each state’s residential rental increase law says
The end of the moratoriums means landlords are once again allowed to increase rents. However, they must still abide each state’s Residential Tenancies Act. The law, which varies from state to state, puts a cap on how much landlords can increase rent, how often they can do it, and the length of time required for them to inform tenants of the upcoming hike.
Here’s what each state’s residential rental increase law says:
New South Wales
Landlords in NSW planning to increase rents need to give tenants a written notice at least 60 days before the rent is increased. They can also raise payments once in a 12-month period for fixed-term leases of two years or more. For fixed-terms less than two years, landlords can only increase rent if the agreement already states the amount or the method on how the increase will be calculated.
Tenants who were not given adequate notice or not notified in writing can refuse to pay the elevated rent. They can also apply to the NSW Civil and Administrative Tribunal (NCAT) within 30 days if they feel the new amount is excessive.
Victoria’s residential tenancy laws require landlords and agents to provide a 60-day written notice to tenants regarding any increases in rent, except when it is based on a fixed dollar amount, in which case it will automatically increase on the specified date in the lease.
Additionally, property owners can only increase rents once in a six-month period for leases starting before 19 June 2019 and once in a 12-month period for leases starting on or after 19 June 2019.
Tenants can challenge an excessive increase with the Victorian Civil and Administrative Tribunal (VCAT) within 30 days after it has taken effect.
Landlords in Queensland are required to give a written notice 60 days prior any proposed rent hikes, and the notice should state the increased amount and the day it takes effect. Additionally, any change in rent can only be implemented six months after the last increase or start of the agreement.
The Queensland Civil and Administrative Tribunal (QCAT) decides on tenancy issues stemming from perceived excessive rent hikes.
Landlords must get an approval from the state’s Department of Commerce for any written notice of increase, and this must be given to the tenants 60 days prior to its implementation.
Rent hikes can only be done after the first six months of a tenancy agreement or within six months of the last rent increase under a periodic lease agreement. For a fixed-term agreement, property owners cannot push up rent unless the contract stipulates either the amount of the increase or the method to be used for calculation.
Tenants can apply to the state’s Magistrates Court for the rent to be changed if they deem it excessive.
Tenants in South Australia need to be notified in writing of any rent increases 60 days prior to the actual implementation. For lease agreements that commenced before March 2014, landlords can only raise rent every six months. For most leases that started after this period, property owners can increase rent once every 12 months or a year from the start of the agreement.
The South Australian Civil & Administrative Tribunal (SACAT) handles tenant issues regarding excessive rent.
Property owners in Tasmania must give tenants a 60-day written notice stating the new rent and the day it takes effect. Any changes in rent must be implemented at least 12 months after the last increase or from the commencement of the lease agreement.
Tenants can file a dispute against an excessive increase with the Residential Tenancy Commissioner (RTC) within 60 days of implementation.
NT residential rental laws only require 30 days of written notice for rental increases, and it needs to clearly state the amount of increase and when the hike begins. Property owners can only raise lease payments at least six months after the start of the tenancy, with subsequent increases permitted once every six months. For fixed-term leases, the stipulations for the increases must be specified in the rental agreement.
The Northern Territory Civil and Administrative Tribunal (NTCAT) is tasked with reviewing and taking action on any tenant complaints regarding rent increases.
Australian Capital Territory
Landlords in the ACT are required to give eight weeks’ notice to tenants of any increases in rent, which can only be done once every 12 months on a periodic lease. But under fixed-term agreements, lease hikes are not allowed unless the amount is specified in the contract.
Tenants who believe that they have been handed an excessive increase can write to the ACAT to apply for a review.
If it's time for you to review your current tenancy rates and management, contact us here for an obligation free discussion of current market conditions. We'd be happy to help.