5 in 10 landlords will pass June rate hike onto tenants

Property Club president Kevin Young said that the survey was “terrible news” for renters who are already struggling with the financial burden of rising rents.

“This snap survey of Property Club members throughout Australia reveals that more than half of all renters will have to financially absorb the latest rise in interest rates,” he commented.

“The survey found that 55.9 per cent would increase their weekly rents to pay for the interest rate rise, 14 per cent were unsure, and 30.2 per cent said they would not increase their rents.”

According to Mr Young, the continued increase of interest rates is “voodoo economics” — meaning “it only pushes up rents, which are a key component of the inflation basket of goods that measure inflation”.

He conceded that while rents have already exploded across the country — and will continue to do so as long as interest rates continue to rise, “mum and dad property investors cannot be expected to constantly absorb the cost of rising interest rates”.

He noted that these investors are, like everyone else, dealing with cost-of-living pressures.

But it’s only the beginning of the bad news, with Mr Young also flagging that “Property Club is predicting that rising interest rates will result in the median weekly rent in Australian capital cities rising by over 20 per cent during the coming year”.

He stated that this would “force many renters to live below the poverty line and even lose their home — a tragedy that should be firmly placed at the feet of the RBA governor Philip Lowe.”

“Higher interest rates have also seen a major fall in lending to property investors, which means fewer rental properties are becoming available at a time when we are experiencing a housing crisis,” the president raised.

As a result, he is urging the federal government to “increase the supply of rental properties by removing recently imposed restrictions on interest-only loans and restoring tax depreciation benefits to second-hand properties that will result in lower-priced rentals quickly entering the rental market”.