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    Why rents continue rising despite falling property prices

According to a report by News.com.au, tenants across Australia’s capital cities are facing continuous rate hikes, despite a significant downturn in the property market.

Data from rent.com.au showed that Melbourne and Sydney observed the maximum hike, despite the apparent drop in the market price of properties. Rent rose by 3.8 per cent for Sydney units and it was up by 2.3 per cent in Melbourne in February.

 
the right time to buy a home
 

Patrick Veyret, policy and campaigns adviser of consumer advocacy group Choice, told News.com.au that moving homes is “really expensive and it’s also really emotionally taxing” for renters. He said that landlords and real estate agents understand this and are taking advantage of renters who do not have a choice.

“They’re likely to often increase the rent and know that people who rent will just accept it because they don’t really have much bargaining power in this consumer arrangement,” said Veyret, who adds that consumer protections must be enacted to “give the power back to the renters.” Veyret also believes that instead of renters going to a tribunal to contest against excessive rent, “the onus of proof should shift to the landlord to prove and provide reasoning why they plan to increase” the rent.


    Ask, and you shall receive!

Yes, instead of accepting the raise quietly, tenants must take advantage of the property downturn to negotiate the increase directly with their landlord or agent.
As more people are putting houses on the market, Mr Veyret says renters have a “decent opportunity” of contesting the increase with their landlord or agent directly. “Just go to the table and be upfront and try and negotiate that this rent increase be decreased,” he said.


    Is it time for you to get out of the rent race and buy a home of your own?

According to Rent.com.au chief executive Greg Bader, rents are unlikely to go down immediately, especially in high-demand areas that are close to a city’s centre or properties in short supply, such as those that are pet-friendly.

As property prices go down and rents increase, this could be the time for several renters to take the plunge and purchase their own abode.


Sounds like a good idea?

If you have been in the same job for over a year, have decent savings and an assured income, use this borrowing calculator to see how much money you can borrow to kickstart your home buying journey.

As you would agree, there are plenty of advantages to homeownership, such as building equity, the price of home ownership, and lower overall cost in some cases. It is also possible to decorate your own house as you please while you cannot enjoy the same amount of freedom in a rented house.

(Read this article to decide whether you should continue renting or buy a home.)

Unfortunately, many first home buyers find themselves locked out of the property market because of the lack of genuine savings. But did you know that some lenders will accept your strong rental history as proof of genuine savings?

To qualify, you need to show your rental ledger from a licensed real estate agent, confirming that you have been paying your rent in full, without any delay, for the past 12 months. You could also ask your property manager to provide a rental letter confirming timely rental payments made by you for the last 12 months. Speak to a mortgage broker now to understand your options better.

In case you do not have any genuine savings and no rental history, our brokers are aware of a few lenders who may still lend you money if you have proof of steady income and a parental guarantee to back you. With a limited parental guarantee, you no longer need a deposit and can fund your dream home without paying LMI or waiting for years to save a deposit. Have a question? Pose it online to our experts to receive a resolution, free of cost. Don’t worry; your information is safe with us. You will not receive any unwanted calls or emails.

 
By Vidhu Bajaj,
HashChing Content Writer
 
 

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