Home News Cairns Regional Council rate hike proposal leaves investment property owners furious

Cairns Regional Council rate hike proposal leaves investment property owners furious

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Owners of investment properties in one of Queensland’s toughest rental markets have described rising public housing rates as a ‘blatant money grab’ that will further exacerbate the housing crisis.

The Cairns Regional Council has sent a letter to landlords in the city informing them of a possible 15-40% increase in fees for non-primary residences from the 2023-24 financial year.

The council said the move will bring it in line with other regional centers such as Townsville, Noosa and the Sunshine Coast.

But investors have questioned the timing of the rise, with the city grappling with one of the lowest rental vacancy rates in the country below 0.6%. Amid news of the rental bidding war A family living in a tent.

Tom Badstuberner, who owns four units on a block of land in Gordonvale, south of the city, said a rate hike could be a tipping point after a series of interest rate hikes and higher home insurance premiums. said.

Tom Badstuebner said he sold it because of the city council, rising interest rates and rising insurance premiums.(By: Realestate.com)

“The council has not provided new services or infrastructure or anything to supplement it,” Badstuebner said.

“It’s just blatant money grabbing.

He described it as “a ridiculous decision, especially given the housing crisis.”

“Landlords will simply raise rents and put more pressure on people who are already barely coping with rising costs of living,” said Badstuberner.

high selling option

Badstuebner said his unit’s rate rose from $7,894 to $10,435 a year after the council changed the multifamily rating category earlier this year.

It was decided to sell.

“We’re just small investors with mortgages,” said Badstuberner.

“We had to raise our rent by $20, but it’s nowhere near what it costs us.

“There will be more and more people like us who cannot afford to keep rental properties. They will be taken by owners and occupiers, and there will be fewer rental properties on the market.”

Price increase applies to base rate

Cairns Regional Council Deputy Mayor Terry James said the rate hike was a floor on the scale and would only apply to the base rate, not the overall rate.

A council room with many people sitting at their assigned desks.
The council has also begun charging separate fees for dwellings that share ownership.(ABC News: Curtis Rodda)

He said 75% of Cairns property owners pay a base rate of $962 a year.

“We are seeing a lot of confusion and will be issuing another letter to clarify that,” Cr James said.

He said the funds raised were not for a specific purpose but to continue providing parliamentary services to the community.

“The council has seen electricity prices rise in the same way and wages have risen as well,” Mr Cr James said.

“We promised to never exceed the consumer price index.”

Fear of rent increase

But Sally Watson, manager of the non-profit Shelter Housing Action Cairns, said she was “disappointed and shocked” by the proposed rate hike.

“We are very concerned that rising rates for private rental housing could lead to further rent increases and reduced supply.

“In the current climate of fragile household demand for housing and rising interest rates and other costs for individual landlords, it doesn’t make sense.

“It’s no secret that Cairns is facing the worst situation the private rental market has seen in over 15 years.

Watson said the company’s supply of rental housing is “very low” and “the cost of rental housing is rising beyond the means of many households.”

As a result, she said, “for more than 12 months, there has been an unprecedented pressure on social services to support housing.”

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