A state by state landlord's guide to rent increases

This article was first published on Your Mortgage.

House rents have continued to soar in almost every part of Australia, hitting a high of $471 per week nationally, up 4% from March last year when the pandemic began, the latest figures from real estate firm Domain has revealed.

Perth registered the biggest year-on-year increase among capital cities at 14.7%, with median rents reaching $430 – the highest since 2015. Darwin came in close second, with median house rents topping $550, a 14.6% jump from March 2020, according to the Domain Rent Report March Quarter 2021.  

Only Melbourne, which endured the toughest coronavirus lockdowns last year, posted a decline, making it on track to become the cheapest capital city to rent a house in the country.

As for units, the cost of renting has dropped significantly with the national median falling to 2013 levels at $429 per week, an 8.1% year-on-year slide.

The decline was driven by significant decreases in asking rents in the country’s two largest cities – Sydney and Melbourne – where year-on-year figures plunged 9.6% and 12.8%, respectively.

Here’s a breakdown of Australia’s median asking rents, according to the Domain’s latest rent report.

 Source: Domain Rent Report, March Quarter 2021

An update on each state’s emergency tenancy law

Domain’s report comes as Australia transitions out of the COVID-19 emergency period and moratoriums come to an end.

It must be remembered that when the COVID-19 pandemic first struck, the federal and state governments moved fast to implement various measures to protect both landlords and tenants, aware that upcoming lockdowns would deal a huge blow to most people’s ability to meet housing expenses. Among these measures was a six-month ban on evictions and rent increases, which commenced in April, but was extended to varying periods by several states to give the rental property market more time to stabilise.

Here’s what each state and territory is doing to support landlords and tenants during this transition period as gathered by rental property website Rent.com.au.

New South Wales

NSW has implemented a six-month transitional period where COVID-19-impacted tenants who accrued rent arrears between 15 April 2020 and 26 March 2021 will not be subjected to the standard tenancy eviction rules for those arrears. NSW Fair Trading will also assist tenants and landlords with negotiating repayment plans for arrears accrued during the moratorium period.

Victoria

From 29 March 2021, rental laws have changed, which include a ban on rent bidding. Rental providers can no longer give a “no reason” notice to vacate as well.

Queensland

Queensland has extended some COVID-19 arrangements for residential tenancies to 30 April. These apply to all general tenancies and rooming accommodation, including social housing. The arrangements include:

• Provisions that allow tenants experiencing domestic and family violence to end their tenancies quickly
• Protections for tenants against being listed on a tenancy database for rent arrears due to COVID-19
• Limits on reletting costs for eligible tenants who end their fixed-term tenancies early
• Short-term tenancy statement extensions for moveable dwellings
• Entry restrictions and requirements to support COVID-19 social distancing measures
• Relaxed repair and maintenance obligations

Western Australia

WA has extended the Residential Rent Relief Grant Scheme (RRRGS) – a $2,000 grant for struggling tenants facing rent increases greater than the normal market rate of 5% a year.

South Australia

SA has put the following measures in place until 31 May:

• Short-term moratorium on eviction for non-payment of rent due to severe rental distress because of COVID-19
• Prevent landlords from increasing rent, when the tenant is suffering from financial hardship due to COVID-19
• Extend the tenant’s ability to arrange to have repairs carried about by agreement with the landlord
• Provide general protection for tenants who breach their agreement due to complying with a direction under law relating to COVID-19

Tasmania

The COVID-19 Rent Relief Fund and Landlord Support Fund will continue to provide up to $2,000 or four weeks rent per fund to eligible tenants and landlords. Additional support will also be available from 1 April and 30 June.

Northern Territory

No new support measures are in place in NT. Tenants are encouraged to have open discussions with their landlords.

Australian Capital Territory

ACT has measures in place to support tenants and landlords as the territory transitions out of the moratorium. These include:

• Transition period that limits evictions based on rent arrears accrued during the moratorium for COVID-19-impacted households in certain circumstances
• Continued ability to negotiate reduced rent
• A requirement for the ACT Civil and Administrative Tribunal (ACAT) to consider making a payment order instead of an eviction order for COVID-19 impacted household
• Continued ability for a tenant in a COVID-19-impacted household to terminate their fixed-term tenancy agreement early and without penalty
• Continued restrictions on a negative listing being made about a person from a COVID-19-impacted household on tenancy databases
• Ability for a tenant from a COVID-19-impacted household, which had previous ACAT orders suspended during the moratorium, to apply to ACAT to vary or set aside those orders
• Tenants on pre-6 April 2020 fixed-term tenancies may continue to pay just two weeks rent in advance. All other tenants are already able to do this.

What each state’s residential rental increase law says

The end of the moratoriums means landlords are once again allowed to increase rents. However, they must still abide each state’s Residential Tenancies Act. The law, which varies from state to state, puts a cap on how much landlords can increase rent, how often they can do it, and the length of time required for them to inform tenants of the upcoming hike.

Here’s what each state’s residential rental increase law says:

New South Wales

Landlords in NSW planning to increase rents need to give tenants a written notice at least 60 days before the rent is increased. They can also raise payments once in a 12-month period for fixed-term leases of two years or more. For fixed-terms less than two years, landlords can only increase rent if the agreement already states the amount or the method on how the increase will be calculated.

Tenants who were not given adequate notice or not notified in writing can refuse to pay the elevated rent. They can also apply to the NSW Civil and Administrative Tribunal (NCAT) within 30 days if they feel the new amount is excessive.

Victoria

Victoria’s residential tenancy laws require landlords and agents to provide a 60-day written notice to tenants regarding any increases in rent, except when it is based on a fixed dollar amount, in which case it will automatically increase on the specified date in the lease.

Additionally, property owners can only increase rents once in a six-month period for leases starting before 19 June 2019 and once in a 12-month period for leases starting on or after 19 June 2019.

Tenants can challenge an excessive increase with the Victorian Civil and Administrative Tribunal (VCAT) within 30 days after it has taken effect.

Queensland

Landlords in Queensland are required to give a written notice 60 days prior any proposed rent hikes, and the notice should state the increased amount and the day it takes effect. Additionally, any change in rent can only be implemented six months after the last increase or start of the agreement.

The Queensland Civil and Administrative Tribunal (QCAT) decides on tenancy issues stemming from perceived excessive rent hikes.

Western Australia

Landlords must get an approval from the state’s Department of Commerce for any written notice of increase, and this must be given to the tenants 60 days prior to its implementation.

Rent hikes can only be done after the first six months of a tenancy agreement or within six months of the last rent increase under a periodic lease agreement. For a fixed-term agreement, property owners cannot push up rent unless the contract stipulates either the amount of the increase or the method to be used for calculation.

Tenants can apply to the state’s Magistrates Court for the rent to be changed if they deem it excessive.

South Australia

Tenants in South Australia need to be notified in writing of any rent increases 60 days prior to the actual implementation. For lease agreements that commenced before March 2014, landlords can only raise rent every six months. For most leases that started after this period, property owners can increase rent once every 12 months or a year from the start of the agreement.

The South Australian Civil & Administrative Tribunal (SACAT) handles tenant issues regarding excessive rent.

Tasmania

Property owners in Tasmania must give tenants a 60-day written notice stating the new rent and the day it takes effect. Any changes in rent must be implemented at least 12 months after the last increase or from the commencement of the lease agreement.

Tenants can file a dispute against an excessive increase with the Residential Tenancy Commissioner (RTC) within 60 days of implementation.

Northern Territory

NT residential rental laws only require 30 days of written notice for rental increases, and it needs to clearly state the amount of increase and when the hike begins. Property owners can only raise lease payments at least six months after the start of the tenancy, with subsequent increases permitted once every six months. For fixed-term leases, the stipulations for the increases must be specified in the rental agreement.

The Northern Territory Civil and Administrative Tribunal (NTCAT) is tasked with reviewing and taking action on any tenant complaints regarding rent increases.

Australian Capital Territory

Landlords in the ACT are required to give eight weeks’ notice to tenants of any increases in rent, which can only be done once every 12 months on a periodic lease. But under fixed-term agreements, lease hikes are not allowed unless the amount is specified in the contract.

Tenants who believe that they have been handed an excessive increase can write to the ACAT to apply for a review.

If it's time for you to review your current tenancy rates and management, contact us here for an obligation free discussion of current market conditions. We'd be happy to help.