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.
Today Australia rental market has a problem, there is not enough rental houses on the market. This has happened also in the past, but not to the same extend. So, we start wondering what went wrong, and how it can be fixed, at the same time, we should ask ourselves what is the reason, so that we do not make the same mistake again.
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NOTE, ARTICLE No: 11.
This article is the eleventh 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.
Welcome to our article,
Dear readers, before I can say anything about
Australia rental problem, we must look at what the politicians are doing to fix
it, and if we believe that what they are doing can fix it. We need also to look at
what is happening in the rental market. So, let us paste some reports that I
found in the net, the 8th of June 2023, in this shortened quote
hereunder.
(And I quote)
Sydney's inner-city
market has seen the biggest surge in rents with Treasury expecting a record
400,000 migrants to move to Australia by the end of this financial year,
followed by 315,000 in 2023-24.
The city was home
to nine of Australia's top 10 suburbs for rental increases, with Melbourne
having one entry.
Sydney was a city
of extremes with rents soaring near the city but falling in scenic areas by the
water, including on the Central Coast an hour's drive north.
Rental increases of
more than 20 per cent were recorded in parts of Brisbane, with double-digit
increases also occurring in Perth and Adelaide.
(End of first quote)
Looks like that
everywhere in Australia the house rent is going up. So, let us see what the
politicians are doing, to solve the problem, if they can solve it.
Anyhow, the present
government, believes that they can solve it buy building more affordable housing
themselves, with our taxpayer money. See what I found on the net, and quote
again.
The federal
government has confirmed it will divvy up its $2 billion social housing booster
payment to Australia's states and territories on a per capita basis.
- NSW will receive the lion's
share of $510 million, Victoria will get $496m, Queensland $398m and
Western Australia $209m.
- South Australians will see
$135m of the money, while Tasmania, the Northern Territory and the ACT
will take minimum slices of $50m each.
- The funds will be allocated
over the next fortnight.
- Thousands of new homes will
be created for public housing tenants with both new developments and
upgrades of existing properties that are currently uninhabitable on the
drawing board.
- All of the money is to be
committed by states and territories within two years ending June 30,
2025.
- Prime Minister Anthony
Albanese announced the Social Housing Accelerator at the Victorian Labor
conference on Saturday.
- He did not specify exactly
how many homes would be created, saying that would depend on how
governments chose to spend the money.
"State and territory
governments have agreed that it will be in perpetuity, so we're not going to
have public housing built and then flogged off," he told reporters.
(End of the quote) Now let
us say something how we see this situation.)
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How I see Australia rental
situation.
From what is happening is
very clear that there are not enough rental properties available in Australia.
Here we must point out that the Australian economy is set to run with the
capitalist system, and in normal times is self-regulate itself, so, there is no
need to do anything, but this time something went wrong, so let us try to explain the way we see it.
One of the reasons for this
rental shortage is that for the past ten years or longer, the rents have not
gone up as much as other things, so, the few small investors that were
investing in rental properties, have stopped investing, because they cannot
make any money. The people in charge must understand that they have created
this problem themselves, because of the several charges levied on property
owners, and this includes rental properties, some of these charges are
completely unjust, but they say that they must do that because they need the
money, so, this problem has been created from the authorities in charge, and
now they are looking for a way out. But what they are trying to do may not be
the right way to solve the problem for good, like building some affordable
rentals themselves.
But I believe that this
rental problem cannot be solved for good, unless they fix what has caused it
first. Anyhow, the government wants to build affordable housing, that they are
going to pay with the taxpayer money. This may help, but it will not solve the
problem, they must understand, that if the private investors are not able to
run rental properties and make money, then the government body that is going to
run affordable rentals, can only run them at a loss, I hope I have explained my
views clearly.
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But what are the main
causes.
As we have said, there are
not enough affordable rental properties for rent, because there is not enough
money in rentals, if there was enough money, there would be investors. So, it
is not what people believe that if you have a rental property, you are rich. In
fact, I believe that if you have rental properties, you and your family have
lost your freedom, and you feel that you are the slave of the tenants. This is
only the first problem, because the biggest problem is how much money does this
property make, and how it affects everybody in the family, which usually will
be negative. So, let us explain how it affect property owners in a negative
way.
Now, if you rent the property yourself, it is like being on call all the time, and you have to solve all the problems yourself, and sometims it can be frustrating; if you give it to an agent, it will cost you money, and that is not all. If you are a pensioner, you
may lose part of your government pension, and in some case the entire pension,
because of the assets test. The assets test is the biggest problem for a lot of
people, the greatest problem for the pensioners’ is that the assets test is set
at least three time too high. So, for every dollar you can earn from the rental
property, you very likely will lose fortnightly three dollars of government
pension, this is one of the reasons why, there are no more small investors,
wanting to invest in rental properties. I hope that I have explained myself
clearly.
Now, the assets test affects
other people as well in a negative way, like jobseeker and sick people, and
other groups as well. So, it would be helpful if the government removes the
assets test, or adjusts it in a more realistic way, that will reflect the same
values for everybody. But let us go back to talk about rentals.
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How can we fix the rental
shortage.
To fix the rental shortage,
not only the government should build affordable rental properties, and run them
the best way they can, even if they lose money. But above all they should
abolish the assets test or set it up in a way that the property owners can earn
the same money they can lose. You see, the property owners that we call
landlords run a service to the community, and if you run a service you are
supposed to earn some money. If you do not earn money, then this service
becomes impossible to run. I hope you see what we mean.
So, it seems to me that we
need more money for rentals, and it would help if they gave more rent
assistance to the tenants that are on low income, instead of blaming the
landlords, that sometimes are worse of financially than the tenants.
Anyhow, if what I have
suggested can be done, then the rental market can slowly return to normal. If
they do not, then the rental problem will be a lot harder to solve.
Well, this is what we have
learned so far, and every day that I write something about rental, I will learn
a bit more. So, the advice now is to abolish the ASSETS TEST ON AFFORDABLE
RENTAL, and things will improve.
Anyhow, we will continue to write more articles about rentals, but this article is becoming too long. So, see you in our next article, Housing Problems in Australia, Article One.
To see more click on this link, How to Fix the Housing Disaster, My Views.
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NOTE. This article above, is the link to the following article, Housing problems in Australia, article one. This article is also the eleventh 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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