With rental vacancies rising in most capital cities, more pressure is being placed on landlords to reconsider rent increases.
The question of when to increase rents is a tough one that affects Australia’s 1.3 million landlords and millions more tenants, and experts are divided about the answer.
New data from SQM Research shows there were 69,258 vacancies nationally in June, up from 65,075 in May, and the current vacancy rate sits at 2.3 per cent.
SQM Research managing director Louis Christopher attributes the trend of rising vacancies to an increase in completed dwellings, renters taking advantage of low mortgage rates to become first home buyers, and more people occupying each dwelling.
“In the 2011 Census the number of occupiers per dwelling increased for the first time in about 70 years,” he said.
“The market is increasingly favouring tenants across the country.
“We are seeing evidence that rental growth is slowing. Potential property investors have to ask themselves what are they buying into – they will not be able to lift the rent immediately,” he added.
University lecturer, author and investor Peter Koulizos said landlords should not raise rents just because the lease has come up for renewal, as reported by News Corp.
“If you have a good tenant, they are worth their weight in gold,” he said.
“I wouldn’t always jump at the chance to increase rent – I would prefer to have my rental property tenanted by a good tenant.”
Mr Koulizos said investors should do their research to work out a fair rent for their properties.