Rental crisis in Australia: How long after your rent increase should the landlord wait before doubling?

Australia’s rent crisis has hit a new high, with tenants complaining of increases of up to 22% in weekly payments.

Domain revealed on Thursday, in Australian capitals, the average weekly rent was $515 for a house and $460 for a flat.

That’s up from $460 and $410 respectively in the same period a year ago.

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A lack of supply in the market has contributed to rising rents, as well as subsequent rate hikes by the Reserve Bank of Australia.

The tenants bear the bulk of the costs.

In a Reddit thread this week, renters said they’ve been hit with increases of more than 20% in some cases.

One said that while he expected the rent to rise, he was surprised when it went from $220 a week to $270 – a 22% increase.

Another said his rent had risen from $620 a week to $680 – but was pragmatic about the hike.

“Honestly, I’m glad I got hit with a rent increase when interest rates first went up,” the user said.

“They’re unable to do it again for another 12 months.”

Watch the video below: Airbnb property broken into so family has a place to sleep, wash and do laundry before leaving

Heartbreaking reason why a young family breaks into the house.

Heartbreaking reason why a young family breaks into the house.

So what if your rent has gone up in recent months?

States and territories each have their own rules when it comes to tenancy law and how often landlords can raise rent.

In queensland and Western Australiain most cases, landlords can only increase rent every six months and must give 60 days notice.

In Victoria, New South Wales, southern australia, Tasmania and the LAWlandlords can raise the rent once every 12 months and must also give about two months’ notice.

In the North territorylandlords can raise the rent once every six months and only have to give 30 days notice.

Tenant advocacy groups and industry experts told 7NEWS.com.au there is nothing to stop landlords passing on the cost of increased mortgage repayments to tenants.

“Landlords can raise rent due to rising interest rates, but they need to be prepared for tenants to push back if it’s not warranted or excessive,” said Shannyn Laird, responsible for customer experience.

“Landlords can also increase the rent if the lease is periodic (i.e. it is not fixed) and the tenant has not had a rent increase for a certain period.”

She said tenants without fixed-term leases should be prepared for a rent increase notice, if they haven’t already had one.

“Be prepared for potential contact with the agent or owner as costs increase so you are prepared and ahead of the game,” Laird said.

Watch the video below: Adelaide’s dad recounts rental struggle

Adelaide housing crisis exposed as dad recounts rental struggle

Adelaide housing crisis exposed as dad recounts rental struggle

The RBA raised rates three times to 1.35% from a record high of 0.1%.

For someone with a 30-year mortgage of $600,000, that equates to an increase in monthly repayments of just under $400.

Cameron Murray, a researcher at the University of Sydney Henry Halloran Trust, told 7NEWS.com.au it was “a common misconception that higher interest rates will lead landlords to raise rents”.

“And, of course, they can try that,” he said.

A lack of supply in the market has contributed to rising rents, as well as subsequent rate hikes by the Reserve Bank of Australia. Credit: JAMES ROSS/AAPIMAGE

But, he added, the market is largely driven by demand.

“You have to remember that ultimately the rental price is determined by the rental market, not the cost to landlords,” he said.

“We know that because most homeowners don’t have big mortgages, most homeowners make a lot of money, and only a few recent buyers may have big mortgages.”

If the rental market were shaped by cost to the owner, negative gearing would not exist.

“Rents are not determined by the cost of owning a property and if they were, negative gearing could not exist because you could always raise rent to recoup your costs,” Murray said.

Negative gearing is actually a tax offset that bridges the gap between the cost of an investment property to an owner and what they can get out of it.

The Australian Taxation Office defines a rental property as ‘negatively geared’ if the owner’s deductible expenses exceed the income from the property.

Domain’s quarterly report found that home rental affordability pressures are shifting demand toward units. Credit: AAP

Therefore, says Murray, supply and demand would be the main driver of rental costs.

Unfortunately for tenants, this too is in favor of landlords.

Domain’s quarterly report found that home rental affordability pressures are shifting demand toward units.

Domain’s head of economics and research, Dr Nicola Powell, said the numbers were a combination of a range of factors.

They include high purchase prices locking people into the rental market for longer, rising costs of passed on home loans, fewer building completions and investors taking advantage of the recent price spike.

“While still a very competitive market, increased investment activity has helped ease pressure on tenants, with national vacancy rates holding for the fourth month and choice rentals increasing in June,” Powell said.

“This, combined with new government first-time homebuyer incentives such as ‘Help to Buy’, has the potential to help more renters transition to homeownership, alleviating some of the demand pressures the rental market is currently facing.”

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