Dear readers, I believe that the rental shortage can be fixed, if we look at the reasons why this has happened. But the main reason, I believe it is because today there is not enough money in renting properties, and a lot of expenses and problems. This is not what most people want to hear, but we must accept that this is the truth, because if there was enough money, there would be lots of people wanting to own properties, and lots of properties for rent.
Anyhow, in this article, we are discussing what are the main causes, and then, what could be done to fix the rental market. I know that what I am writing here is my
personal views of the situation. But even the views of a
single bloke can sometimes help find a solution. Anyhow, I have been
following the rental market shortage for a while, and in my lifetime, I have
been renting one or two properties myself, perhaps then it was easier that
today to rent a property, but even then, it was not easy. Anyhow, I know
something about rentals and the problems that people encounter, so, I want to see
if there is something that I can suggest how to improve the situation, but it
seems to me that today there is no quick fix option, and I believe that if we
don’t do something about it soon, it may even get worse, because prices will continue
to increase on the rental market.
One of the reasons of course is that there are not enough houses
or unit being built, and until they build more houses and units this shortage
will continue, and the prices of houses and rental will continue to go up, but
that is not easy to do, because there is also this skilled labor shortage and
other financial problems.
Today it seems to me that this problem is not going to go away
by itself, like it did in the past, when everything was more balanced and affordable.
Therefore, it needs to be studied and fixed by the governments of the day. But
most times the people that we send to the government, instead of looking at the
reasons why this is happening and find a solution, they blame the landlords, when the landlords
find it hard to stay on the rental market, because there is not enough money to
run the business, and one of the reasons, is that there are too many levies to
pay. Then the price of the properties goes up, and to build a new building
costs a lot of money, that is hard to recuperate during the usefulness of the building,
it seems all a chain reaction that continues, and needs to be balanced and fixed,
if we want to go back to normal rental affordability, so, what needs to be done?
What we believe needs to be done.
I believe that what needs to be done, is to look closely at what
was different when there were enough properties on the market, and somehow
there were enough rental properties being built, and somehow, they were able to
keep pace with what was needed. Today we blame the government that lets too many people come to Australia, but I believe that, this is only part of the negative situation, and it needs to be balanced. In fact, in the past it seemed to be a good thing that
people came to Australia, at a steady pace, and the economy was running along
well, because there was enough work for the building tradesmen, but that
equilibrium has been lost today. So, it would be good, if we can find a way to
balance those needs.
Anyhow, to make the right decisions we must look at the reasons,
why today the rental shortage is this bad, because in the past there has not
been a rental shortage so severe, so, what are the reasons?
One of the reasons is the governments greed that charge too many
high levies on rental properties, and the landlords are forced to pass in on,
they cannot run a business at a loss. Sometimes what they do is evident, at
other times it just happens, and they do nothing to fix it, because they
collect more money. One of these examples can be found hereunder, where the
Queensland government collects more money, just by not changing the land tax threshold.
Which we are going to show you hereunder.
One of the main issues is the land tax.
AS I have said, one of the issues is the land tax levy, that
these days is too high. (So, here I quote from what I found on the internet)
From the internet
Taxpayers would need to pay $1 billion each year to give
landlords the tax breaks they desire, Queensland government modelling shows.
The Treasury analysis comes in response to lobbying from the
Property Owners Association of Queensland and the Real Estate Institute of
Queensland (REIQ) to reduce land tax on landlords.
The Property Owners Association wants
the state government to raise the tax-free threshold on land
values by 200 per cent, from $600,000 to $1.8 million.
Treasury modelling shows the proposal would cost the budget $1 billion a
year over the next four years.
The REIQ wants land tax thresholds indexed to keep up with inflation
since the threshold has not changed since 2008.
A Treasury spokesperson said the proposal would cost taxpayers hundreds
of millions of dollars each year, rising to $400 million in the 2027/28
financial year alone.
"Land tax is a critically important part of Queensland's revenue
base," the spokesperson said.
"It pays for things like new roads, hospitals and schools, and it
pays the wages of nurses, teachers and police officers.
"Even so, Queensland has one of the most generous land tax
thresholds in the country."
Treasury analysis shows 0.9 per cent of Queensland's population pays
land tax, disproportionately affecting people who own multiple investment
properties.
Land tax does not apply to homeowners who live in their house as their
principal place of residence.
(End of quote)
What we have said above, is only one of the charges that the landlords must
pay, and there are many other fixed expenses that the landlords must pay, so,
do not blame them for the high rent, they need to run a business, and to run a
business one must make money, or at least break even, otherwise they will go
broke. This indicates what needs to be done to fix the rental market.
I could say many other things about charges and running cost, but this article is becoming too long, so, I need to write another article soon, about the cost of running a rental property, and other things.
To see more click on this link, How We Can Fix the Rental Shortage,
See you next time.
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