• Tristan Angelini

The Effect of the Pandemic to the Australian Rental Market





There has always been an unstable balance between the renters and landlords – which evidently worsened because of some clashes that occurred during the last two federal elections. Housing affordability has been an issue for the longest time. It has grown into a crisis that resulted in homelessness among a percentage of the population.


In 2018, the Andrews government proposed rental reforms that created more frustrated landlords. A lot of them even threatened to pull their properties out of the rental market. The Real Estate Institute of Victoria comprises of real estate agents and landlords all seemed to agree that it would cripple the state’s housing market. One in four Australians rent their home and it has been increasing which should be enough reason to make sure that any reforms will protect and benefit them.


The spread of coronavirus around the world has made this relationship much more complicated. Three months ago – back when the virus has not been this massive, people were much more complacent. Because of this, weaknesses in the housing system have started to arise. It’s become more apparent. In the past, we have mentioned how affordable housing has become almost inexistent over the past several years. And the problem did not just stop there. Another major flaw with Australia’s rental market is how the housing is finalized through tax settings such as negative gearing and capital gains.


Most properties that are negatively geared would mean that owners will lose money despite claiming tax breaks. Negative gearing by definition is a form of financial leverage wherein the interest repayments and the investment expenses are bigger than the rental return. Which sounds so unfair.


There have been some reports as well where renters have been refused to avail of a rental reduction due to the current worldwide situation. While it is true that during this time, a rent decrease is something that is needed, it’s not always possible. Other property managers have also denied some rental payment adjustment requests. In fact, Facebook groups were created to support tenants who have been vying for it.


The fact remains that rent in Australia is consistently high. That, and rental markets remain tight, are two of the major reasons why a lot of renters opt for overpriced tenancies. The sad part is, not everyone would be able to do the same, especially if the funds are not available. There is an obvious need for more housing options. Sufficient, affordable, and well-maintained housing has been something experts have been pushing for years now.


The demand is there. Unfortunately, unforeseen circumstances and the existing problems have hugely affected the rental market. Despite some ongoing construction projects, which are seen as key factors in the economy’s recovery, the pandemic made the fragile rental system of Australia much more problematic. Housing stimulus packages can only do so much, but a firm and long-term solution should still be prioritized with a timeline set.


While the government finds ways to solve the problem, Xotel is eager to provide affordable and safe housing options for those who need it. Visit our website and Facebook page for more information.

0 views
Exclusively Occupied 

Xotel Pty. Ltd.

Level 5 224-236 Queen Street,

Melbourne 3004

  • Facebook
  • Instagram
  • LinkedIn Social Icon

© 2023 by Xotel