COVID-19 – There is some comfort for tenants. It’s a confusing time for renters and landlords amid the COVID-19 crisis. The information hasn’t been free flowing – but here’s what we know so far.
The Australian government has announced numerous stimulus packages to support the many Australian landlords and renters, but the details surrounding it remain limited. The lack of information has made many Australians confused including the professionals working in the industry
While we currently wait for further elaboration and additional information from the Government, we take the opportunity to summarise some of the statements made.
There is some comfort for tenants with a nationwide six month ban on evictions
The Prime Minister Scott Morrison has announced a nationwide six month ban on evictions for tenants occupying both residential and commercial property who are finding it difficult to pay their monthly rent due to the COVID-19 epidemic that is causing a wide spread of financial stress.
This initiative is to support Australians to remain housed with their families during this health scare as many tenants have lost their jobs without choice.
Renters will appreciate the relief to be safely home through this self isolation period with families, but a cloud remains on landlords. Many landlords work very hard to establish a property portfolio and often rely on the rental incomes to either live off or pay the investment debt.
Establishing a six month ban on evictions can help the tenant but it could cause significant issues to landlords. The six-month moratorium on evictions will be governed and legislated through each state and territory jurisdiction. Unfortunately this part has not yet become clear.
The concern has increased greatly after Prime Minister Scott Morrison encouraged landlords and tenants to “sit down and talk”. Figure out a plan that will benefit each. This issue seems at this stage more complicated for commercial property as the business leases operate for extensive periods compared to a residential agreement that is often just 6-12 months.
Property managers will also be experiencing the difficult to be the intermediate between landlords and tenants.
Prime Minister Scot Morrison indicated a financial assistance for renters
In an additional conference Prime Minister Scott Morrison said the government is also investigating a rental assistance payment scheme. No further details have been announced, but this will also involve heavy cooperation between federal and state governments. It is a very sensitive subject that effects many livelihoods and seems to be taking longer to address compared to other financial pressures the Australian economy is currently facing.
The banking industry will play a heavy hand in managing these issues. The big Four banks (ANZ, CBA, NAB & WBC) are currently offering loan repayment suspensions. In short, the assistance is to freeze loan repayments for six months with interest payments being capitalised on top of their existing loan balances. All banks may be working through this differently, so we strong recommend contacting your mortgage brokers to discuss this in further detail before acting. The advice from a financial adviser would also be very helpful.
What is the Victorian Government doing?
The Victorian government is yet to release any meaningful information at this stage, but there is some comfort for tenants. It has expressed interest to implementing the out the six month moratorium on evictions but nothing has been announced yet. The state government still needs to announce its plans to offer financial assistance to renters.
The Victorian Premier Daniel Andrews said the details are still being finalised.
Other states of Australia have or will address these pressing matters so if you have property investment in other states, you should monitor the communication from government.
We are helping our clients through this difficult time. There is some comfort for tenants, but for new purchases we are also implementing great cash flow strategies to help you continue to create or expand your property portfolio. There are extraordinary opportunities in response to the COVID-19 crises but the most important point to make is… “Please stay safe and enjoy the extra time you have with family”.
That’s a wrap:
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While we have taken care to ensure the information above is true and correct at the time of publication, changes in circumstances and legislation after the displayed date may impact the accuracy of this article. If you want to learn more, please contact us. We welcome the opportunity to assist you.
Mar 2020
