If you’re a renter in Australia who’s recently received a rent increase notification to the effect of “Times are tough, I need to increase the rent,” let this one sink in: it’s now more likely than not that your landlord owns more than two investment properties, as well as their own home, according to new data from the Australian Taxation Office.
The data, collected in the 2020-21 financial year – well before Australia entered its current rental crisis – revealed 51.1 per cent of rental properties were owned by an individual who owned at least 2.6 rental properties, which was 20 per cent higher than 20 years earlier.
“This is a slow, long-term trend,” executive director of advocacy group Better Renting, Joel Dignam, told VICE.
“We hear from renters already whose lives are not filled with much pleasure. Constantly dealing with the cold in winter, the heat in summer, living paycheck-to-paycheck and often being in debt – there’s not much sunshine in a life like that.”
“It makes me sick of this stuff around ‘I’m doing it tough, I need to increase the rent’. If you own three properties, you are wearing a little bit of risk and giving your renter a little bit of a break is just… the right thing to do.”
The data also revealed that the year was the most lucrative on record for property investors, with 53 per cent of Australian landlords making a profit from their tenants that year, totaling more than $10 billion.
This was when many landlords were also given up to 50 per cent waivers on their land taxes to disincentive them from kicking tenants out during lockdowns.
Better Renting estimated those tax breaks saved landlords $2 billion.
“It’s the highest rate of profit at the same time as people providing that profit through work, through the sweat of their brow, is really struggling to actually keep food on the table,” Dignam said.
As house prices skyrocketed during the pandemic, more and more people were priced out of the housing market and trapped in the rental market. As the number of renters grew, so too did the demand, and the rental property supply shrunk.
in 2021, about 31 per cent of Australian households rented their homes, which means the majority were owner-occupied. But the owner-occupiers and landlords are not to be confused.
“I think most of us struggle to understand just how well-off landlords actually are,” Dignam said.
“If you’re a homeowner struggling with mortgage repayments, you have much more in common with the renter next door than someone who owns their own home plus two others,” Dignam said.
In the same year, 14.9 per cent of people who lodged tax returns in Australia declared interest on rental properties.
“The pattern here is wealth gains wealth and if you own property it’s so much easier to use that to get more property. You’ve got cash flow from your investment, you can borrow against it,” Dignam said.
“It’s really hard to get started at all if you don’t own property – and it’s even harder when you’re competing against people with multiple properties at an auction.
“It terrifies me to think we will get to a place where more and more people are renting – but also renting from a smaller and smaller group of wealthy landowners.”
But Dignam said he also held another more optimistic outlook if he put his faith in the power of people.
“There’s clearly a growing conversation that we have to do something to stop that,” he said.
“We have seen changes to rental laws; we’ve seen much more appetite for bigger changes.”
It’s true: state tenancy laws have stiffened in recent years. Particularly in Victoria, renters have earned the rights to keep pets, hammer nails in walls and ensure all doors and windows are lockable under the Andrews Labor Government.
But things are more sluggish on a federal level.
The Australian Greens have been deadlocked in negotiations of the Labor Government’s Housing Australia Future Fund bill to build 30,000 affordable homes between 2025 and 2030 for months and on Monday they, with the help of the Coalition, rejected the bill in the Senate in order to demand more.
They saw it as a win, and both Labor and the Greens have compromised minimally on their stances. But this stalemate over one of Labor’s centrepiece policies can’t go on forever and, at some point, some form of the bill will pass.
“Even self-interested politicians can see the writing on the wall and [know] they have to at least appear to be doing something,” Dignam said.
“There’s both pressure and, you know, this is an opportunity for political parties. In the space of a few years this has become the number one issue for many more people.
“A lot of politicians are slow to respond to that but I think there’s a growing movement.”
Aleksandra Bliszczyk is a Senior Reporter for VICE Australia. Follow her on Instagramor on Twitter.
