Experts say rents could soar by 20% in some Australian cities as a ban on price hikes ends the same week as JobKeeper

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  • In several Australian states a moratorium on rent increases is set to end in late March, only days before the Government’s JobKeeper program concludes.
  • The tenants union warns that renters need more support during the transition, with more than half also receiving Jobseeker payments.
  • Real estate experts say they are already seeing sharp increases in rent on new tenancy agreements.
  • Visit Business Insider Australia’s homepage for more stories.

A moratorium on rent increases is set to end on March 28 in several Australian states only days before Jobkeeper runs the clock on March 31, as protections on vulnerable tenants and workers reach a cliff’s edge.

Added to the risks for those who have been supported by both programs, agents say increased evictions and further stress on the rental dispute resolution system are other likely outcomes, with renters in Victoria and Western Australia likely to be hardest hit.

“Many renters have not financially recovered in a state that had ensured no less than three public health lockdowns,” said Jennifer Beveridge, CEO of Tenants Victoria, in a press statement.

She argues Victoria’s renters need extended protective measures.

“These renters face being forced to leave their homes unless further protective measures are put in place for them,” she said, adding that many renters have not financially recovered from the strain of the state’s three lockdowns.

These renters face being forced to leave their homes, she said, unless further protective measures are put in place for them.

Vulnerable renters and workers pushed off a cliff

COVID-19 rental protections have been in place in Victoria since the first national lockdown in March 2020 — with the state experiencing three lockdowns in total in 2020, with similar rental moratoriums in Western Australia and NSW.

Victoria and WA’s rental moratoriums included bans on rent increases and will end on March 28, with the NSW regulations, which focused on eviction protection, ending on March 26.

A report published by Tenants Victoria found that half of respondents lost some, a significant portion, or even all, of their income since the pandemic began; nearly a third received JobSeeker and a further one-sixth received JobKeeper.

Adding to the strain are the estimated 110,000 jobs projected to be lost when the JobKeeper wage subsidy finishes at the end of March, according to Commonwealth Bank economists.

Victoria and Western Australia will be hardest hit

In Victoria the situation will be exacerbated by new rental tenancy laws featuring 130 changes to existing legislation that come into force next Monday, March 29

Despite the resistance of some landlords and real estate 71,370 reduced rent agreements were lodged with Consumer Affairs Victoria as of March 7 this year, including the extension of including extensions of existing agreements, the Tenants Victoria report said.

Now with the end of the eviction moratorium, the report said renters are expected to feel the pressure of attempts to recover rental arrears while seeking to find a cheaper alternative.

In NSW, the state government has announced support measures. In early March it said it would institute a six-month transition period to follow the end of moratorium protections on 26 March, including some protections against eviction for tenants with COVID-induced arrears.

In Western Australia, president of the Real Estate Institute of WA, Damian Collins, told the Australian Financial Review he expects rents for tenants previously protected by the moratorium to rise by 15-20% when it comes time for them to renew.

Collins said the vacancy rate is less than 1% in Perth’s property market, and said he’s seen major price increases locked in for fresh leases signed over the past few months.

However he’s optimistic about the overall impact this will have. “It’s going to hurt some people but overall Perth remains a very affordable place and most people will cope,” he said.

Speaking to the Australian Financial Review, Ray White’s head of property management Emily Sim said she is worried about the impact the end of JobKeeper will have on the ability of some tenants to pay rent.

The head of network property management at McGrath Estate Agents, Michael Conolly, said 1.6% of tenants on the company’s 33,000-strong rent roll were more than two weeks in arrears, which is the trigger point for eviction. It’s a much higher figure than usual, he said.

However he also said he expects delays in enforcing evictions as a result of congestion in various state tribunals that will increase after moratoriums end.

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