By Pamela Hunter, Community Services Manager
When the pandemic first hit Australia, COVID-19 did not discriminate, and we saw people of all walks of life impacted. The same now goes for the rising cost of living. It too does not discriminate, and we are all feeling the pinch. The difference this time around is that landlords hold the upper hand in how much of the impact they pass on to their tenants.
With rising interest rates, vacancy rates at an all-time low and increasing pressure on household expenses, rent increases are disproportionately impacting the more vulnerable in our communities.
Across Australia, the rental vacancy rate fell to 0.9% in July, with challenges heightened in many regional areas in the first half of 2022, such as Wagga Wagga (0.3%) and Albury (0.7%).
VERTO’s tenancy consultants are hearing stories of increasing competition for the few available properties. We’ve heard of those searching for a rental being asked to pay higher than advertised rent or bidding for the property against other potential tenants.
It’s an unsustainable situation that is impacting housing security across the country.
Rising no-grounds termination notices
At VERTO’s Tenancy Advice and Advocacy Service (TAAS), we continue to see an increase in no-grounds terminations in many markets. These terminations allow a landlord to evict a tenant without reason, giving them just 90 days to find alternate housing.
This year alone, the number of tenants seeking our service due to one of these eviction notices has risen by a staggering 190%.
On the other hand, the number of clients challenging rental increases hasn’t risen at the same rate, with just 32.65% of cases fighting an increase. Anecdotally, this indicates that no-grounds terminations may be being used as a loophole to remove tenants and increase the rent because they can’t be challenged the way an increase can.
Rental increases can see tenants facing difficult choices
This disparity may also be driven by tenants’ reluctance to fight a rental increase in case they are evicted as a result. In theory, retaliatory evictions can be fought in the tribunal, but in reality, they are tough to prove.
As a result, we are seeing a situation where some tenants are choosing to pay rents they can no longer afford, forgoing necessary expenses, including medication, utilities and groceries, to cover mounting housing costs. In fact, according to the Australian Bureau of Statistics, more than 51% of lower-income households in NSW are spending more than 30% of their income on rent, putting them under financial stress.
A disproportionate impact on our most vulnerable tenants
While low vacancies and rising rents are a concern for every tenant, the most vulnerable in our community are often hit the hardest. Tenants experiencing unemployment, domestic violence, mental health issues or other additional challenges may be more at risk of being removed in favour of higher income earners or tenants perceived as more reliable.
Rising homelessness impacts us all
Of course, the result of a situation like this can be, and often is, homelessness or housing instability. The number of tenants at risk of homelessness who contacted our service has more than doubled in 2022, and the waitlist for social and community housing continues to grow. In most cases, public housing simply isn’t an option to address the immediate risk.
Homelessness is a terrifying prospect that only exacerbates existing challenges and presents new ones for vulnerable people, often creating an impossible cycle to break. At a macro level, it leads to a raft of health, social and economic impacts.
Homelessness is a concern on every level, and as rental challenges mount, more and more Australians are at risk.
Help is at hand for vulnerable tenants
Tenancy services like VERTO’s TAAS are on hand to help tenants with tenancy challenges, from unresolved maintenance issues to rental increases and financial stress.
Our mission is to help at-risk tenants understand their rights and responsibilities and explore every avenue to retain tenancies, while providing additional support, such as free financial counselling services, to those who need it.
VERTO successfully negotiates with landlords to resolve issues and retain tenancies in around 50% of cases. For those cases that progress to the tribunal, we assist with the process and can attend proceedings to provide support and advocacy.
Tenants facing rental challenges can contact VERTO’s Tenancy Advice and Advocacy Service on 1300 483 786 to seek confidential advice and support, explore options and receive referrals to additional services.