How a volatile rental market could impact some of the most vulnerable in our communities 

Pamela Hunter is the Community Services Manager at VERTO – who run the South West NSW Tenants Advice and Advocacy Service. This blog post was originally published at www.verto.org.au/blog. Thanks to VERTO and Pamela for allowing us to republish.

The past 12 months have had a significant impact on many tenants, particularly those who may be at risk of financial hardship or homelessness. VERTO’s Tenants’ Advice and Advocacy Service (TAAS) helps tenants to navigate these challenges every day, and with today’s unprecedented rental market conditions, it’s something we expect to see for some time to come. 

This volatile market has wreaked havoc in more ways than one, and it can have serious consequences for individuals and communities.  

Volatility leading to instability 

Across areas covered by VERTO’s TAAS, including Goulburn, Wagga Wagga, Albury, Bathurst, Orange and surrounds, on average, 61 per cent of tenants who engaged with the service in the last year have experienced a rent increase. 

It is also worth noting that the increase is disproportionate across the region. In Bathurst alone, we have seen a 550 per cent rise in the number of  tenants reporting a rental increase from the previous year. Orange has also been disportionately affected, with a 228 per cent rise in tenants reporting increases. These unprecedented increases are resulting in the indiscriminatory threat of homelessness.

A driver of these increases and an issue in itself is low vacancy rates. Across the region, availability rates are as low as 0.6 per cent.  

So we have a situation where rents are rising sharply, and the number of available properties is decreasing rapidly, creating a perfect storm for tenants. Not surprisingly, a commensurate rise in rental arrears might be on the cards, with many tenants likely to be unable to pay these higher rents.

Moratorium helped, but protections are limited 

During COVID-19, the NSW Government put a moratorium on evictions, designed to help struggling renters avoid homelessness and retain their current rental property.  This moratorium, alongside the JobKeeper payment, provided some assistance to those who were struggling. Across our region, we saw an average 42 per cent decrease in rental arrears while these measures were in place.

Although the moratorium has officially ended, the NSW Government recently announced a six-month transition period in response to widespread calls for further assistance. There are limited protections in place, and to be eligible, tenants must be able to show that they are experiencing financial hardship. However, with the economy recovering and an increase in employment activity, this can be difficult to prove. During the transition, landlords and tenants may negotiate a repayment plan, and a tenant cannot be evicted due to these arrears if they are meeting the terms of the plan. 

More are becoming vulnerable

In the current conditions, housing instability and homelessness are very real risks for some in our communities. Of the tenants who sought assistance from our TAAS in the last year, one in four were at risk of homelessness, a 39 per cent increase on the previous year. 

The VERTO team is also anecdotally reporting an increase in tenants being hesitant to request maintenance or urgent repairs, in case this leads to a no-grounds eviction. As the winter months approach and heating becomes a necessity, this is a huge cause for concern. 

Receiving a No-Grounds Notice of Termination (NOT) is a concern for many in our community.  A NOT is essentially a notice that the lease will be terminated without any known reason and can lead to homelessness or lack of housing stability, particularly in the current conditions. Unfortunately, over the past 12 months, we have seen a significant increase in NOTs across our region, including a 200 per cent increase in Bathurst alone. One in three tenants we assisted during the last year had received this notice.

Domestic violence victims may be further impacted 

Of the tenants our service supported over the last year, 107 disclosed they had experienced domestic violence. I am concerned that with low affordability, low vacancies, and an increase in no-grounds terminations, we may see a situation where those in domestic violence situations may be forced to choose between staying with perpetrators or sleeping rough. This is a situation no one wants to see. 

What to do if you are affected 

If you are a tenant who has received a NOT or is otherwise facing tenancy issues, help is at hand.  Your local TAAS can support you, helping you to understand your rights, responsibilities and options. This is a free service. Find your local advocacy service here.

Thanks to a grant from the Financial Counselling Foundation, VERTO now offers a NSW statewide financial counselling service that can assist eligible tenants work through financial hardship. If you are facing financial challenges, you can reach out to the team on 1300 4 VERTO (1300 483 786) or info@verto.org.au for support. 

The last 12 months have been incredibly challenging for many. If you are experiencing emotional distress, you can contact LifeLine 24 hours a day on 13 11 14. If you are experiencing domestic violence, contact the Domestic Violence Hotline, 24 hours a day on 1800 65 64 63. If you are in danger and need immediate support, always contact 000.