The Residential Tenancies Act is being reformed in 2025.
Key reforms include:
- No grounds eviction will be banned
- Rent increases will now be limited to only one per year
- It will be easier to have pets in rental properties
- There must be fee-free ways for tenants to pay rent
- Paying for background checks when applying for a property will be banned
Landlords absorb bulk of interest rate hikes
The Reserve Bank of Australia has debunked the myth that landlords are passing on increased mortgage costs to tenants, leading to unstainable rent increases.
The RBA recently conducted a study using tax return data from Australian property investors and found that, on average, for every dollar increase in their mortgage interest costs, investors increased their rents by just 1 cent.
This revelation comes amid a period of significant interest rate hikes, with the RBA raising the cash rate from 0.1 per cent to 4.35 per cent between April 2022 and January 2024.
The study found that despite a median monthly interest payment increase of $850 for investors during this time, the corresponding rent increase was minimal. “Our estimate suggests that this $850 increase in interest’s costs would have raised rents by less than $10 per month or just over $2 per week” The study said. “We find little evidence of direct pass-through from interest costs to rents.”
The RBA study attributes rapid rent increases to the fact that there is simply not enough housing supply to meet demand.
Both these articles appeared in a recent edition of The Real Estate Institute of NSW. Arnold Property has been a member of the Real Estate Institute of NSW for over 20 years.
Please give Steve Arnold a call if you would like to discuss the contents of either article. Steve has over 35 years of experience in Residential Property Management.
