'Most landlords can't afford to have no rental income'
On the eve of the government announcing help for tenants who can't pay the rent, landlords are asking for assistance from government, regulators and banks to pay their mortgages.
"Let's be clear - landlords understand the situation. The vast majority are decent, hard-working, average Australians who own just one rental property," explains Ben Kingsley, chairman of the Property Investors Council of Australia (PICA).
There are 8 million Australians living in a rented home and CoreLogic says investment properties account for 27% of Australian housing stock. It says there are 2 million landlords, owning 2.6 million investment properties. Around 71% of landlords own one investment property.
Calls are mounting on the government to put in place a temporary eviction moratorium for Australians who have lost their jobs because of coronavirus and can't pay the rent.
Kingsley says tenants and landlords must treat each other with mutual respect and help each other through these tough times.
Already there are stories of landlords cutting the rent of their tenants so that they can stay in their homes. But tenancy groups say there are landlords who are not so co-operative.
"They (landlords) want do whatever they can to assist the community, but the fact is most can't afford to bear the cost of having reduced or no rental income while still needing to cover mortgage repayments, tax commitments and repairs and maintenance," says Kingsley.
The recent accusations that landlords are unsympathetic and unwilling to fulfil their roles in providing safe housing at reasonable market rents have been both hurtful and divisive, says Kingsley.
PICA has put forwarded a range of ways to ease the burden on landlords including:
- APRA's relaxation of lending guidelines allowing investors to refinance more easily at better loan conditions.
- Lining up property investors' interest rates and financial charges in line with those offered to homeowners.
- Banks passing on rate cuts in full.
- Easing restrictions so property investors can move easily to interest-only loans.
- Providing an interest-free loan repayment 'holiday' period.
- Ensuring interest-only and principal and interest mortgages have the same interest rate applied
- Tax depreciation breaks to help offset the burden such as allowing investors to claim the actual remaining depreciation on the remaining life of the asset.
"All we are asking is for is some sensible help so we can afford to accommodate rental losses," says Kingsley.