The COVID-19 pandemic hit Australia hard, with the unemployment rate rising and many struggling to make ends meet. As a result, the state government introduced a rent increase freeze in Victoria in 2019, which prohibits landlords from increasing rent during the period of the pandemic.
So, you might be wondering, why is this rental freeze relevant now, especially that it’s no longer active? Well, with rent prices rising significantly in New South Wales, local parties are calling for the same rent freeze implementation.
If you’re renting in Australia and feeling the pinch, we get it. In this article, we explore the rental situation in NSW and the implications of this freeze for both renters and landlords.
What was the Rent Increase Freeze in Victoria?
The rent increase freeze in Victoria was a policy that prohibited landlords from increasing rent during the COVID-19 pandemic. This policy was introduced in March 2020 and ended on 28 March 2021.
What are the Implications for the Real Estate Industry?
The rent increase freeze has had significant implications for the real estate industry, including:
National Rent Freeze
The Victorian Government’s rent increase freeze has sparked a conversation about a nationwide rent freeze. Some are calling for a national rent control policy to be implemented, which would cap rent increases for all renters across the country. This would also control excessive rent increases and help tenants deal with the rental crisis.
Increasing Supply
Another key issue that has arisen is the need for more houses to be built to increase supply and reduce the pressure on the rental market. The federal government has included a policy proposal in the recent budget to encourage supply in this area.
Social Housing
The rent increase freeze has highlighted the need for more social housing to be built to help those who are struggling to find affordable housing. This is an area that the government is considering as a solution to the current rent crisis.
Chandler Mather, member of the Australian Greens, suggests that “the rent increase freeze may seem far-fetched to some, but it is a necessary step to prevent a major social crisis. It is essential to protect tenants from skyrocketing rents during these difficult times.”
Will there be a rent freeze in NSW?
Alongside the proposed plan by The Greens to direct $5 billion of funds a year to housing construction, they are also proposing a rent freeze in NSW.
Although unlikely to pass, they are raising concerns about the pressure on renters in the current environment. With increased cost of living and skyrocketing rent, the freeze would put a limit on the amount of rent increases and the frequency.
“Freezing rent increases and doubling Commonwealth Rent Assistance will ensure we provide immediate relief to the millions of households in serious financial stress as a result of soaring rents,” said Mr Chandler-Mather.
As a tenant, make sure you know how much house rent can rise per year in NSW to avoid any disagreements.
What are the Implications for Tenants?
The rent increase freeze has several implications for tenants, including:
Rent Reduction
The policy ensures that tenants’ rent will not increase during the pandemic, which helps to reduce their financial burden. This policy also provides some assurance to tenants who may be struggling to pay rent due to the impact of the pandemic on their income.
No Grounds Evictions
The rent increase freeze also prohibits landlords from evicting tenants without a valid reason. This is a fundamental understanding to avoid arbitrary evictions, which would leave people in even worse situations than before.
Periodic Rental Agreements
The policy applies to both fixed-term and periodic rental agreements. This means that landlords cannot increase rent for tenants who are renting month-to-month.
What are the Implications for Landlords?
If you’re renting out a home and wondering if landlords should increase rent, we recommend assessing the reasons first. The rent increase freeze has several implications for landlords, including:
Loss of Income
Landlords are losing out on potential rental income due to the freeze on rent increases. This can have a significant impact on landlords who rely on rental income to make ends meet.
Fixed-Term Agreements
The rent increase freeze does not apply to fixed-term agreements. This means that landlords can still increase rent for tenants who are on a fixed-term agreement.
Rental Agreements
Landlords must comply with the terms of the rental agreement that they have signed with their tenants. This means that they cannot increase rent during the term of the agreement.
Real Estate Agents
Real estate agents who manage rental properties on behalf of landlords must also comply with the rent increase freeze. This means that they cannot increase rent for their clients’ tenants during the pandemic.
The Future of Rent Increases
The rent increase freeze in Victoria brought the issue of rents into the spotlight. With many people renting long-term and the cost of property skyrocketing, there is a need for change. The government has recognised this and is working on solutions to make renting more affordable for all Australians.
It remains to be seen what the future holds for the rental market in NSW, and in Australia as a whole. However, it is clear that the rental market is a key issue that needs to be addressed to ensure that Australians have access to affordable and secure housing. The rent increase freeze is a step in the right direction, but more needs to be done to ensure that everyone has access to safe and affordable housing.
What is the Queensland Rent Freeze?
The Queensland Rent Freeze is a new law that has been introduced to protect renters from unfair rent increases. Under this new law, landlords are not allowed to increase the weekly rent for a rental property for two years from the commencement of the bill. This means that rents will be frozen at the amount agreed upon by the landlord and tenant or the publicly advertised rent amount before 1 August 2022.
Is There a Rent Freeze in Australia?
During the COVID-19 pandemic, a rent freeze was introduced in Victoria to protect families from unfair rent increases. It was a successful policy that prevented families from being pushed into financial stress or homelessness. It is time for Australia to introduce a nationwide rent freeze to help people during these difficult times.
How Much Rent Increase is Legal in Australia?
For fixed-term agreements, the amount of rent increase or the method of calculating it must be stated in the rental agreement. In general, rent increases are limited to the prescribed amount, which is 10% more than the increase in Canberra CPI. This means that landlords cannot increase the rent by more than this amount without a valid reason. It is important for tenants to understand their rights and for landlords to comply with the law when it comes to rent increases.
