The real estate industry has warned the coronavirus situation facing tenants, landlords and agents is "a mess" as cash-strapped residents struggle to pay rent and owners face mounting costs.
Real Estate Institute of Australia president Adrian Kelly said the residential industry was hoping for a rent assistance package after billions of dollars in subsidies were delivered to tourism and other coronavirus-hit sectors.
Landlords, agents and renters are battling with the flow on economic effects of the coronavirus. Credit:Henry Zwartz
"There's nothing specifically for real estate industries," he said. "The easiest way to fix this problem from our point of view is to keep rents flowing.
"It's a mess and it's yet to play out."
National cabinet will not consider residential tenancies when it meets on Tuesday, leaving the sector in limbo. It is preparing to sign off on a new code of conduct for commercial tenancies to avoid cascading vacancies across Australia's shopping centres while also releasing modelling on the coronavirus infection forecasts.
Prime Minister Scott Morrison and state and territory leaders implemented a moratorium on all residential evictions in March to avert fears of widespread homelessness but have yet to come up with a plan for how to keep rents flowing.
Hundreds of thousands of workers have since been stood down or sacked, putting them in line for a month-long wait for the government's support packages through Centrelink. The first of two single $750 coronavirus payments was delivered to welfare recipients on March 31, but the $1100 a fortnight JobSeeker payment will not begin until April 27 and the $1500 a fortnight JobKeeper is not due until May.
NSW has flagged it will introduce land tax concessions by providing landlords with a tax discount in exchange for rent reductions. Other states are expected to follow but a nationally consistent approach on rental waivers or a proportionality principle for residential tenants has yet to be adopted. The proportionality principle will apply to commercial landlords after the national cabinet meeting on Friday, forcing them to give business tenants rental discounts in line with their revenue reduction.
The residential situation has left tenants, agents and landlords exasperated as residents attempt to negotiate their rent while owners wait for government direction before granting any concessions.
Mr Kelly warned real estate agents could also be on the brink as commissions taken from rental payments dry up and property managers are let go.
"The problem is we have eight million tenants in three million rental properties. This is not going to be a small problem."
The institute on Monday asked the Fair Work Commission to halve the real estate agent minimum base salary from $54,500 to $27,250 to avoid thousands being stood down.
The Morrison government and the Australian Council of Trade Unions have called for landlords and tenants to work together. The Australian Securities and Investments Commission has threatened landlords and agents with fines of up to $126,000 for giving unqualified financial advice if they suggest tenants access their superannuation to meet rent.
"Right now tenants need support and relief from rental payments – not threatening messages and half-baked financial advice that could be ultimately against their best interests," said ACTU president Michele O'Neil.
Housing Minister Michael Sukkar said on Wednesday it was not in any landlord's interests to lose a "great tenant who is going through a short-term difficulty".
Tenants Victoria chief executive, Jennifer Beveridge, said everyday she was receiving reports of tenants being reminded that "no tolerance" will be shown for people who fall behind in rent.
"We are even hearing people having their rent increased in the middle of this public health emergency," she said.
Your Property Your Wealth buyer's agent Daniel Walsh, who owns nine properties with his wife across NSW, Queensland, Victoria and South Australia, said landlords should hold off on reducing rent until there is clarity around the legislation.
"Landlords who give tenants rent reduction or a rent holiday may impact their insurance claim for rent default or possibly any rental assistance for tenants from the government, should this be introduced," Mr Walsh said.
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