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Get the facts

Lots of claims are made about the rental crisis in WA but not all of them are true. Get the facts on common myths below.

Mortgages and interest rates

MYTH: Rising interest rates leave landlords no choice but to increase rents excessively

THE FACTS: The reality is that rents were increasing long before interest rates began to rise. For example – between 2020 to 2023, the median rent increased by about 16% every year – or by $175 per week, from $375 to $550. And while interest rates have increased by a few percent since beginning to rise last year, rents have increased double digits in the last 12 months. All investments carry an element of risk. Apocalyptic rhetoric about inevitable rent hikes are self-fulfilling prophecies that only compound the cost of living crisis. 

It’s also important to also keep in mind that while interest rates are rising, so is the value of the value of the property asset for the owner. The inevitable increase in asset wealth, combined with very generous taxpayer funded subsidies to investors of negative gearing and capital gains tax discounts, worth about $13 billion every year, means that most investors in the property market will benefit substantially from their investment. Further, interest rate increases combined with not increasing the rent by the same amount leads to a loss for the owner, providing a tax benefit through negative gearing.

More broadly though, Make Renting Fair agrees with senior economists who are saying interest rate hikes are a blunt, cruel and largely outdated instrument to control inflation and we need to be using more contemporary and better targeted measures. And of course the best way to control rental inflation would be to introduce a rent freeze and rent caps as a way to stabilise rents.

Evictions and terminations

MYTH: The Real Estate industry has claimed that removal of no grounds evictions would cause thousands of investors to sell their properties, leading to a shortfall in rental properties, which in turn would cost the government over one billion dollars to fill the gap with additional social housing

THE FACTS: An independent review of the concerns raised about the removal of no grounds evictions was conducted by a number of academic and tenancy law experts with input from the Australian Housing and Urban Research Institute (AHURI) Curtin Research Centre and Dr Chris Martin from the City Futures Research Centre, UNSW Sydney. The Review concluded that the negative impacts predicted are inaccurate, exaggerated, not reliable, and have not been observed in other jurisdictions where similar reforms have taken place. No-grounds evictions give cover to discrimination and retaliation. Reasonable landlords don’t need them but they make all tenants less secure in their homes.  You can read the full review here.

MYTH: Reforms to make renting fairer will spook investors away from the real estate market

THE FACTS: There is no evidence this has happened in other Australian states where similar changes have been introduced. Analysis by the University of New South Wales of bond data from NSW and Victoria found no evidence of any disinvestment effect from rental reforms in those states. Jurisdictions like the ACT with the strongest renter’s rights also have the highest vacancy rates – meaning the number of rental properties is at a healthier level than in places like WA where we have the weakest protections. In the ACT, rather than feeling threatened by improvements that will make renters feel more secure, property investors are positively encouraged by tenancy laws that provide security and stability of tenure across the rental market.

Source: CoreLogic / ABC

MYTH: Removing no ground evictions will make it impossible for landlords to remove ‘problem’ tenants

THE FACTS: Tenants who don’t pay rent, damage the property or behave in an antisocial way will still be able to be evicted under the existing grounds and via a normal breach notice. In fact, it is far quicker and simpler for a landlord to evict a problem tenant for a breach, which only requires 14 days notice, than via a “no reason” eviction which requires 60 days notice. The only change the removal of “no grounds” eviction will make is to protect good tenants from arbitrary eviction, which will improve security of tenure and prevent homelessness.

MYTH: Only a small number of evictions are “without grounds” and there is no evidence they are used excessively

THE FACTS: “No reason” evictions may be a small amount of the total but the threat affects every renter, 100% of the time, causing stress and anxiety and preventing tenants from reporting maintenance issues or attempting to negotiate excessive rent increases.

MYTH: An eviction is only a ‘real’ eviction if a bailiff is called

THE FACTS: There are three points at which a tenancy can be terminated in Western Australia. The first is via a termination notice issued by a landlord, the second is via court orders granted by a magistrate, and the third and final form is if a bailiff is required to enforce the court order. Whether ordered by the landlord, by a magistrate or by a bailiff, there is nothing voluntary about a tenant being told that they need to leave their home and take all their possessions and go who knows where. All three are evictions, and the outcome is usually the same, homelessness.

MYTH: Removing “no reason” terminations will reduce the options for landlords

THE FACTS: In WA legislation there are already over a dozen ways to end a tenancy by giving a reason, including breach of agreement, failure to pay rent, sale of the property, antisocial behaviour or damage to the property. This list of reasons already exist in the Residential Tenancy Act. This will stay the same (or possibly even be added to) in the legislation amendment. The removal of ‘no fault’ eviction doesn’t mean you can no longer evict people, it just means you have to give them a reason. This seems to be a common misconception at the moment. These forms of eviction are quicker than “no reason” terminations and they provide clearer, fairer means for both landlord and tenant to know where they stand. Victoria, NSW, Tasmania, Queensland and the ACT have already decided to remove “no reason” terminations because there are plenty of easier, quicker ways to evict a tenant. Replacing no reason evictions with additional specified grounds for termination is not taking anything away from landlords – it grants stronger rights and responsibilities to everyone.