Leaked email advises landlords to increase rent amid housing crisis
A real estate agency in Brisbane has come under fire over a leaked email in which landlords were advised to consider raising rents by more than 20 percent amid Australia’s worsening rental crisis.
The email, sent by Ray White East End, asked landlords to consider whether their properties were being “under-rented” and advised them to increase rents by “above 20 percent” - more than double the rate of inflation - with potential earnings of an extra $10,000 a year.
“Our property managers have been reviewing all our lease renewals and on average recommending a 17% rent increase on the leases renewed in October & November this year,” the email said, per The Guardian.
“As we are planning December lease renewals, the average lease renewal recommendation is above 20%. This can be as much as $10,000 per year in additional rental income.”
The agency said that “many landlords are not being provided with the information to make an informed decision” about rent increases, claiming that landlords were being advised to sign long-term leases with increases of $5 to $20 a week.
The email also said that most tenants “are agreeable” to the increases and would understand that it is “fair and reasonable” based on what is available on the market.
“On average, apartments in West End/Highgate Hill/South Brisbane/Brisbane CBD are renting for one bedroom $480 to $520+ [a week and for] two bedrooms $675 to $850+ [a week],” the email said.
“If you are not achieving these rents (at a minimum), you should be asking why?”
It comes as the Queenlsand government prepares to hold a housing summit to address rising homlessness and rental stress across the state.
Penny Carr, the chief executive at advocacy organisation Tenants Queensland, said the email was an example of “opportunistic price-gouging” that is happening across Australia at the moment.
“Rents are unaffordable for people at the moment and tenants are having to absorb increases because of fear of not finding another property or becoming homeless,” she said.
“We should only allow rent increases above CPI if they’re justifiable and there’s been major work to the property or something’s had to be replaced.”
Ms Carr said rent increases have been due to vacancy rates and supply and demand, and that the email dispels the myth that a land tax proposed by the government last year for interstate investors is to blame.
Meanwhile, Ray White East End principal realtor Luke O’Kelly said rental affordability relies on investors.
“Over the past 12 months, Brisbane has had some of the strongest population growth in the country and this has most clearly shown up in rental growth,” Mr O’Kelly said.
“Right now, Brisbane doesn’t have enough homes for those that want to live here … with rents rising so quickly, Brisbane needs more property investors.”
Fiona Caniglia, executive director of not-for-profit housing and homelessness organisation Q Shelter, said the timing of the email couldn’t be worse.
“It is disappointing to hear this the week of the emergency housing summit to be honest,” she told news.com.au.
“We already know that many vulnerable Queenslanders are struggling to secure a rental property in the first place.”
“There are record numbers of people showing up for the small number of properties listed right across Queensland. Such an increase will only benefit those on higher incomes and will of course again negatively affect vulnerable Queenslanders, forcing more people into homelessness.”
Ray White’s chief economist Nerida Conisbee defended the email in a statement shared with the outlet, saying that the market is currently ideal for investors.
“Right now, Brisbane doesn’t have enough homes for those that want to live here,” she said.
“This is making it tough for renters but does make it a good place to invest. While red hot house price growth is unlikely to start up again in the near future, yields are increasing as rents rise.”
With Australians paying an extra $7.1 billion in rent over the past year and the average renter spending $62 more a week than this time last year, Greens housing and homelessness spokesperson Max Chandler-Mather said the email showed that urgent action is needed.
“It’s this sort of flagrant price-gouging that demonstrates exactly why we need a national two-year freeze on rent increases,” he said.
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