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‘Price-gouging’: The rental policy driving tenants into homelessness

·4-min read
Man walking dog past for rent sign
Rents are rising fast and putting renters in a vulnerable position. (Source: Getty)

Lily*, a renter on the age pension living on the NSW south coast, has been looking for a place to rent for six months after her landlord terminated her lease last year.

She believed the landlord wanted her out of her home to put the property back on the market at a much higher rate than the landlord knew she could afford.

Finding a new place she could afford in her home town proved so challenging she had no choice but to stay in her existing rental well beyond the date specified in the termination notice.

She said she had no idea when her landlord would lose patience and force her out.

Unlike in Victoria, where tenancy laws have been reformed so that landlords must now give a reasonable reason to ask tenants to vacate, in NSW it’s possible for someone like Lily to be evicted if the landlord wants to increase the rent.

Called something slightly different in each state, these “no grounds” or ”no reason” evictions can be handed out after the fixed-term lease ends.

NSW Tenants’ Union chief executive officer Leo Patterson Ross told Yahoo Finance that in NSW, around 60 per cent of tenants rented outside a fixed-term lease at any one time.

Ross said it was becoming increasingly common for landlords to explicitly tell their tenants they planned to end the lease to attract a tenant prepared to pay $100 a week extra or more for the place.

“So this is really behaviour that could be called price gouging in other industries and, in renting, we've sort of made it normalised,” Patterson Ross said.

He said it was not uncommon to hear of tenants who could have absorbed the rental increase but were never contacted by the landlord on the matter.

Patterson Ross said the conversation about unfair evictions had ramped up in recent years, and typically attracted support from Labor in most jurisdictions.

Tenancy-advocacy organisations like his are trying to move governments towards a list of reasonable excuses to replace no-grounds evictions.

In Victoria, landlords can ask renters to leave once the fixed term is over (with a notice period of 60 days, and sometimes less) for the following legitimate reasons:

  • They’ve decided to move into the property themselves

  • A family member will be moving in

  • Major reconstruction, repairs or renovations are planned

  • The property is going to be demolished

  • The property is to be sold

  • The renter wants to do something else with the property, such as turn it into a business.

Landlords in Tasmania, Australian Capital Territory and Queensland must also supply a valid reason to evict tenants.

Vulnerable renters under pressure

Soaring rents are pushing many vulnerable renters towards homelessness.

In March, the annual rental growth rate was sitting around 12.1 per cent for the regions, according to CoreLogic figures, with rental growth in capital cities slower but still on the rise.

Jennifer Beveridge from the Victorian Tenants Union said the organisation had seen an increase in the number of households falling behind on their rental payments and being asked to vacate.

COVID had driven a wave of evictions in past years but she said rising cost-of-living pressures were creating a fresh set of issues for renters.

She said there had also been a significant increase in the number of people being evicted because the landlord wanted to sell the home due to the skyrocketing housing market.

With a federal election looming, Beveridge called on the major parties to recognise the growing number of lifelong renters.

“I think what we're seeing is silence on the issue of renting, and the option of renting as a valid form of housing is not being discussed,” she said.

“It continues to be seen as, ‘you will rent until you can buy’, and we are seeing more and more people who will never buy.”

She also called for an increase to the Rental Assistance Payment, which echoed calls for higher welfare payments from organisations such as the Antipoverty Centre, the St Vincent de Paul Society and Australian Council of Social Service (ACOSS).

*Not her real name.

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