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The NSW government’s much-hyped rental reforms come into effect on 19 May. Property managers will once again be called upon to manage and minimise the harm these reforms will inevitably inflict. After all, its property managers who understand better than anyone else what’s in store, writes Tim McKibbin, CEO of REINSW.
“These reforms will drive investors out and create a rental shortage. The ultimate losers will be the people needing housing.”
“I have seen $ thousands in losses caused by tenants who allowed animals in their rental properties destroying carpeting, doors and screens, backyard lawns, and leaving a permanent smell of urine or other pungent smells that can’t be removed.”
“There is a housing crisis so the government should be doing everything in their power to resolve this, not disadvantage the people they need to assist with resolving this issue!”
These are real comments from people working with tenants and landlords on a daily basis. They have been captured through the Real Estate Institute of NSW (REINSW) campaign which invites feedback from investors, property managers and everyone else interested in relieving – not exacerbating – the rental crisis.
A key objective of the campaign is damage limitation. In NSW, the reforms are coming and tenants are about to find out just how damaging these reforms will be. They come into effect at a time when tenants are already weathering a perfect storm of extremely low vacancy and high rents.
But if, as an industry, we can make sufficient noise to prevent similar reforms being replicated at a federal level, it will be worthwhile. Contribute here.
According to the NSW Rental Bond Board, there were 977,756 bonds held as at the end of March. It’s our best guide to calculating the number of properties currently rented in the state. The figure is about 7,300 higher than in March last year.
Overlay this with population growth, one contributor of which is immigration. According to the most recent ABS annual net overseas migration figures, 120,073 people arrived in NSW for the year.
The discrepancy is obviously huge and lays bare the extent of the rental crisis. Unfortunately, the response is at best symptomatic, damaging and politically motivated.
Amid the volatility caused by the NSW government’s residential tenancy reforms, recent data on investor activity paints a confusing picture. Agents overwhelmingly report investors are net sellers in the current climate, as they understandably react to the erosion of their rights by choosing other investments.
At the same time, the percentage of new home lending that goes to investors is up on the 10-year average, CoreLogic analysis shows, which may point to a higher turnover of investment grade properties, with a larger number of investors selling while others are buying.
Then there’s data from the Australian Housing and Urban Research Institute which shows approximately half of all investment properties are being resold within two years of tenants living in them.
Clearly, there’s much to consider for investors. For tenants, as the gap between supply and demand for rental properties grows ever wider, there’s considerably less choice.
And for the other important group of stakeholders in this mess – property managers – the challenges are set to intensify. This quote is from a NSW real estate business owner:
“I can assure you that these changes will drive experienced property managers out of the industry. This will have a significant ripple effect across the sector, impacting landlords, tenants and the broader economy.”
That really says it all.
Tim McKibbin is the CEO of the Real Estate Institute of NSW (REINSW).
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