Allan Qi did not plan to become a real estate investor.
At the age of 32, he bought an apartment to live in the western suburbs of Sydney six years ago, but when he moved to Melbourne he became a landlord.
However, he is also a renter and has lived in the same house in the eastern suburbs of Melbourne for the past five years.
The rent he receives does not cover the mortgage repayment because the apartment is negatively adjusted.
It’s hard to balance your budget
With a household income of about $ 90,000 a year, technology and design teacher Allan and his wife Juan are already struggling to keep up with their costs.
They are worried about what happens to high interest rates.
“I’m very, very nervous and very worried about what will happen in the future,” said Chi.
Their investment loan is currently fixed, but when it’s over, Alain says he needs to raise or sell his rent.
At the same time, he doesn’t know what the landlord will do.
“I’ve been trying to avoid [putting the rent up] I think everyone is having a little trouble just because they are moving in. “
“But that interest rate rises so much that we need to take it over in order to survive.”
The rental market is already at stake
That’s exactly what many of Australia’s 2.8 million renters are concerned about, says Edwina McDonald, CEO of the Australian Social Services Council (ACOSS).
“People are really afraid that landlords will pass on the rise in interest rates to the lessee, what does the rise in interest rates mean to the lessee.”
After years of record low interest rates, the Reserve Bank began raising its official discount rate in May to counter rising inflation.
Fixed rates are already rising.
RBA Governor Philip Lowe has also shown that cash rates could reach 2.5%, with more rate hikes planned in the future (as some economists predict). ..
This means that many of the floating rates that lenders charge borrowers can reach around 5 percent or more.
So far, it has been difficult to determine exactly how much the rise in rent has affected the rise in rent. Especially because rents can rise at various stages of the year. However, prices continue to rise.
“Rents have risen another 2.4% nationwide since the first rise in interest rates in the rent index,” said Luis Christopher of SQM Research.
The rental market has been tight for months. The vacancy rate nationwide is only 1%, the lowest in 16 years.
“It’s a very tough market at the moment,” said Joel Dignam of Better Renting.
“The size of the rent [increases] What we see, and the lack of flexibility from the landlord, is very worrisome. “
Rent is rising nationwide
The lowest vacancy rates are in coastal areas such as the Gold Coast, northern New South Wales, and the Mornington Peninsula in Victoria.
People moved to these places during the pandemic, but just don’t have enough homes.
Supply shortages are pushing up national prices — the median rent across the country is $ 510 a week.
In Canberra, Dom Cladick is packing his house on the inside north.
He and his three housemates have lived there for the past six years, but in May they received an email from an agent stating that their rent would rise from $ 50 to $ 900 a week. This is the biggest rent increase ever.
“We said we wouldn’t pay more than $ 20 [extra] For a week, that’s how our wages have grown during that time, “said Mr. Cladick.
“Now we are moving.”
But he was one of the lucky ones and was able to find another home that was more valuable.
Now that everything from food to petrol to energy is rising, many are completely out of the rental market, says Edwina McDonald.
“Currently we are in this crisis of the housing, rental and social housing markets,” she said.
Post , Has been updated