RBA rings alarm on high debt levels
Risks to financial stability could be building as house prices and debt levels keep rising, the Reserve Bank has caution...
A real estate industry body is urging the Victorian government to open up the real estate sector for limited transactions to aid landlords, tenants and owner-occupiers suffering hardship.
According to Real Estate Industry Partners (REIP), opening up the sector would enable agents to assist Victorians who need to relocate or evade financial stress.
A statement from the organisation said it is hearing a growing number of hardship stories from clients of REIP offices, with investors in particular being hit hard.
It cited the experience of REIP client Dennis – who did act on the government call for landlords to reduce the rent of their tenants.
Reducing the rent by $160 per week on his investment property, Dennis said even with such a discount, the tenants have missed the last two payments and expressed a need to leave.
According to the REIP, the property may be vacant for up to six weeks before private inspections can commence, should the tenants need to vacate.
“This investor will earn no income in his property for a significant period of time,” the REIP stated.
Calling it a matter of when, not if, his tenants leave, Dennis said it would be “a massive financial burden”.
“We’ve got our own mortgage, and I’m not in a financial position to be paying two mortgages on my own without any rental income to support that,” he commented.
“Housing is a necessity, yet we can’t even get a professional photographer through the property to relist.”
REIP CEO Sadhana Smiles said a reopening of the sector is “crucial” for the wellbeing of financially exposed Victorians.
“We have people needing to flee the country in order to stay afloat, and we have landlords leasing their properties for almost half the price to avoid losing their tenants,” she outlined.
According to her, “The stress, anxiety and financial pressures these people are facing can so simply be avoided with very minor changes to the current restrictions.”
She called it beyond unreasonable to expect tenants and buyers to make drastic financial and emotional decisions based on virtual tours alone.
Acknowledging that case numbers are volatile and extreme measures do need to be in place, the REIP said shelter and the avoidance of added financial stress must be considered.
“The real estate industry can and should operate with limited and safe contact, just as the construction and hospitality industry do.”