This article can also be found at this Hub Pages link, Australia Rental Problems Can Be Solved.
To read all the blogs of this selected group about rentals click on this link, http://menfranco.blogspot.com,
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I belive that past politicians are to blame for today affordable rental problems, and they need to fix it.
NOTE, ARTICLE No: 9.
This article is the nineth article of a group of articles, about Australia housing problems and its cause and remedy discussions. We are reposting some articles to show you, what we believe is the cause of the rental shortage in Australia. You see, the Australian Social Security System fails to help the farmers, because of the assets test, and fails and punishes the small rental investors, because of the ASSETS TEST, that is the only reason I can see, why today there are not enough rental properties on the market. So, to solve the housing problem, the politicians need to abolish or reset the ASSETS TEST at least to the same level or below, what people can lose from their pensions or other benefits. Also, to solve the housing problem, the politicians must find grounds to work together with the private sector, and definitely not against the private sector. But today, from what they are doing, they seem to say that the private sector is their enemy, when the private sector is only running a rental service to the community.
Australia Rental Problems Can Be Solved.
Welcome
to our article,
Today, the
people that are renting, complain that they cannot afford to pay the rent, and
the landlords complain that it is hard to keep the rental properties going,
because there is not enough money in this business anymore, and some of them
have given up renting, because there are too many problems and not enough
money. So, this is becoming a real problem. What people do not realize is, that the Australian rental shortage problem can be solved, if we do what needs
to be done, after we pinpoint the reasons, why this is happening. Because in
the past, if there was any rental shortage, it was not as bad as it is now. But
I believe that the people in charge do not know what to do, or, they do not
want to know what to do, because what needs to be done may favour the small
investor, which is the middle class that nobody wants to know about, since they
can look after themselves, if they are in a plain field, so, nobody cares about
them, even though they are the people that make the economy work in a balanced
way.
Anyhow, let us talk
about the rental problem. These days, we can hear every day in the news, that
there are a lot of people in Australia that cannot afford to pay their rent or
buy a house or unit to live in. People believe that in the past it was easier
to buy or rent, and I believe it myself that it was easier. So, in this
article, we are going to discuss what could be the reasons, and if there are ways
to improve the situation. To do that we need to compare what is different
today, and if there are laws or by laws that make the rental properties more
expensive to run, and therefore, it is harder for the property owners to rent
their properties at a lower affordable price.
Now what I am writing here is just common sense, that anyone should be able to work out. So, I wonder why the smart politician have not picked it up, what they are doing wrong, because I can see a few things myself that could make the rental situation better. In our previous articles, we have pointed out that, this rental shortage may have been caused by the assets test change, that has caused the small investors to sell out and leave the rental market.
Anyhow, I believe that to restore the rental affordability issue, it can be easier than most people think, it all depends, if the politicians do what they must do the right way, and they must not try to impress people just to gain a few votes, like what they are doing now, they want to tell the owner, that they cannot increase the rent of their properties, when for about ten years or more, the rent have not gone up like everything else, but the charges to run their property has. So, today the owners are forced to pass the entire charge increase, that they are asked to pay from the authorities in charge, and some of them ask the owners to pay, just because they need the money. We will say something about this hereunder.
The rental
affordability issues.
Having said that, now let us start discussing
this affordability issues. We believe that in the past properties were more
affordable, so, we must look at what has changed to understand the reasons.
This is not easy to do since the Australian economy is a capitalist economy and
free to run its own way. So, most prices are automatically set, from the supply
and demand market, when there are not enough properties on the market the price
will go up. When the prices go up, more properties will be built and come on
the market, so, the market will go down, and it is self-balancing, and
sometimes it is good, at other times it is not.
Anyhow, for me that
I have followed the rental market for a while, I believe that in the past it
was easier to rent or buy, but the greedy politicians have changed the laws,
so, there are a lot more expenses today than in the past , in some cases 50% of
the rent covers the bylaws charges levied on that property, therefore some
property owners cannot make much money from their rental investment, for this
reason people that were going to invest in properties, they do not see enough
money coming in and they do not invest in properties. People need an incentive
to invest their money on rental properties, or at least know that they are not
going to lose their money if they buy rental properties.
Anyhow, it is a well-known fact that people
with a lot of money, knowing that the rental market is risky, they keep away
from it, so, it is up to the small investor, with limited money and struggling
that invest in rental accommodations, but even these people are kept back from
the never ending expenses, that the authorities levy on their property, not
only that, but today while I am writing this blog, some politicians in Canberra
are talking about limiting the rent increase that the properties’ owners can
charge. Okay, it sounds good, and it might work well for the have not. But if
they pass this law, then the few rental property owners left, may have to sell or close
their rental properties and there will be less properties for rent.
I believe that the
government needs to think what they are doing, because if they want cheaper
rent, then their levies on properties must come down a lot, it is outrageous
that in some case, a rented house, may only earn one per cent of its value in a
year, when everybody else make a lot more. Anyhow, there is very little money
to be made in rental properties, but there are a lot of problems to run them.
So, the few investors that are left wonder, if they will continue to stay on
the market or sell out, if they can find a buyer. But it is very hard to find
anyone because rental properties do not earn enough money to run them at a
profit.
Some discussions on
rental issues.
Anyhow, I have called
this article, Australia rental problems can be solved, so, in a way a have promised my
readers that I can suggest a way how to solve it, so, now I must come up with a theory, how the
rental issues can be solved.
I believe that
there are at least two choices, one, all the governments involved in rentals
must chose, whether to build lots of affordable rentals themselves, and run
them at no profit or at a loss, and this can cost several billions and may keep
the government budget in the red for a long time.
The other way is
that the government authorities charge less levies on rental properties and do
other things that keeps the small investors interested in rental properties.
So, let me tell you a couple of things that come to my mind.
Here I am talking
about the small investors only, because I do not care if the rich people lose
money. Anyhow, one of the charges that hurts most small investors in Queensland
is the land tax. The land tax is a levy from the Queensland Government, these
days, they charge $1.7 per thousand of the land value. So, a property that is
on a block of land of ONE MILLION, will be charged, about SEVENTEEN THOUSAND
DOLLAS, per year, then there are other charges from other local authorities.
Now, you can see why rental properties are not worth keeping. The government
may argue that they need the money, but that is not helping the rental market,
and it is driving away the few small investors left.
I believe that the
government authorities do not care for the small investors, or anybody that
owns a property, and they are treated in a way that makes me think they are
discriminated, when they deserve better, to prove that I am pasting an article
I fount on the internet. (And I quote).
Public Trustee leaves pensioner
without money for food and takes 40 per cent of his income.
There's growing concern about the treatment of some of the country's most vulnerable people by a government body that manages their finances. In Western Australia, the public trustee charges higher fees to people with assets, even if they have little cash to spare. (End of quote).
This behaviour of this government
body above, it makes me think that most government bodies are like that. So,
the small investor, would be better off, if during his life, he would have
spent his money to enjoy himself, instead of saving to buy a property
investment, that in the end make life harder instead of better.
How we can solve these rental issues.
Now let me go back
to the rental problem. Apart what we have said above, the other thing that
comes to my mind is that years ago, the assets test for pensioners sickness
benefit and other, was 1.5 dollars per thousand, but today it is three dollars
per thousand, so, a pensioner is deemed to earn $7.5 per cent, on their rental
property value, when in fact, he may earn only one per cent. You see why I
think that the small investor is in a disadvantaged position and is being
discriminated.
My view here is
this. If the authorities want to save Australia from a huge debit by building
lots of affordable rental accommodations, they can choose to abolish the assets
test, not only on the house you are living in, but also on the first rental
house or unit that is rented, or on the market for rent. This will keep some of
the small investors in the rental market, and the problem is half solved.
Anyhow, this is my view how the rental problem can be solved.
What I am
suggesting here, is a possible way how to solve the rental problem for good,
and will save the governments billions of dollars, because they may need to build
fewer rental properties themselves.
You may say that
what I have suggested will cost the government money. I know it will, but it
will be a lot less than if they build all the affordable rental
themselves.
There is more to say, so, see you next time in, Housing Disaster in Australia and What Can Be Done.
To see more click on this link, Australia Rental Problems Can Be Solved.
See
you soon.
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NOTE. This article above, is the link to the following article, Housing
disaster in Australia and what can be done. This article is also the nineth
article of a group of articles that we want to publish. The aim of these
articles is to show you that, the Australian governments can fix these existing
problems, if they run a better Social Security System that fails to help those
that need their help. And we believe that it must be equal for everyone. The
greatest problem is created by the assets test anomalies, so, the ASSETS TEST
must be abolished or adjusted, so that those anomalies are eliminated.
Because it is not fair to the pensioners, and this is one of the reasons why,
there are not enough rental properties on the market, since the pensioners, are
forced to sell out to receive their pension. Anyhow, here the greatest problem
is the politicians that do not want to see it that way, and they make laws that
would stop anybody to invest in rental properties, when they need the private
sector to invest in the rental market, so, the politicians need to make laws
that helps the private sector invest in rental properties. So, let me
explain.
For me there are three main things that the government can do, to come out of this rental crisis: give more rent assistance to the low income earners, abolish the assets test on affordable rental properties and low other levies, so that the small investors can keep renting at affordable price, and stop foreign ownership on rental properties, that is pushing real estate prices up, and the rental market must follow to go up, because the properties cost more.
Some politician believe that the government should build, affordable rental units to solve this rental crisis, but for the government, to build an infinite number of affordable rental units, is not practical, because it will cost the tax payers several times more than helping the present rental set up, as we have suggested above.
To read all the blogs of this selected group click on this link, http://menfranco.blogspot.com,
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