The chief executive officer of the Real Estate Institute of NSW (REINSW) has issued a statement, criticising the lack of consideration given to landlords’ financial situations amid the pandemic.
REINSW CEO Tim McKibbin said once the COVID-19 pandemic was declared, the government had incorrectly assumed “landlords are heartless and would evict their tenants at the first opportunity”, so it introduced immediate legislative intervention without looking at the bigger picture.
“Bizarrely, Parliament crafted a solution to a problem they thought they might have. Surely, the more prudent approach is to deal with an actual problem when/if it surfaces, rather than guessing at what it might be,” Mr McKibbin said.
“Do landlords and tenants really need so much red tape imposed on them to work out a deal? We should also be asking ourselves, would the existing residential tenancy laws have been sufficient to protect tenants?
“Given the speed of the solution, I cannot help thinking that there was too much politics and not enough thought at play.”
Instead of creating an environment whereby landlords and tenants were put onto an “adversarial footing”, it would have been far more productive to foster the “we are all in this together” philosophy, according to Mr McKibbin.
“We do have a few selfish people doing the wrong thing — both landlords and tenants; that’s to be expected. However, the overwhelming majority of landlords and tenants have demonstrated a genuine willingness to help one another,” he said.
“My faith in the NSW residential rental community to voluntarily work together as one, is clearly not shared by Parliament.”
Mr McKibbin asked rhetorically: “Has Parliament created a fair outcome for all, or just passed all the financial pain to the landlord and, in doing so, declared the problem solved?
“There has been no consideration given to landlords’ financial circumstances due to COVID-19 in the public narrative to date — has the landlord lost their job?
“Landlords are expected to reduce and/or defer the rent while at the same time meeting all of their obligations attaching to the property. These include: council rates, water charges, insurances, strata fees and repairs. Some landlords will find themselves in the unenviable position of receiving no rent but compelled to quickly respond to any repairs.”
In addition, Mr McKibbin reinforced that any deferment from mortgage repayments is not free.
“The banks will be charging interest on the outstanding balance. So, landlords who are required to reduce the rent and unable to make their mortgage repayments get the double hit: reduced rental income and additional interest on their loan,” he explained.
“We all hope and believe that by the conclusion of the JobKeeper program, things will be back to where we all were prior to COVID-19. If that doesn’t happen, what then?
“What message has Parliament sent NSW residential property investors? Let us be clear, this is not a chicken and egg question; before someone can be a tenant, we need a landlord.
“We have started to see landlords putting their investment properties on the market. Is this the beginning of a flood? Time will tell.”
Emma Ryan is the deputy head of editorial at Momentum Media.
Emma has worked for Momentum Media since 2015, and has since been responsible for breaking some of the biggest stories in corporate Australia, including across the legal, mortgages, real estate and wealth industries. In addition, Emma has launched several additional sub-brands and events, driven by a passion to deliver quality and timely content to audiences through multiple platforms.
Email Emma on: [email protected]