this post was submitted on 29 Jan 2024
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49
Create a race to the bottom in the rental market (lemmy.world)
submitted 9 months ago by TheBananaKing@lemmy.world to c/australia@aussie.zone
14 comments fedilink hide all child comments
 

Not sure if this counts as politics or not; let me know.

One major brick in the toilet tank of the rental market is apparently investors just 'parking their money' in properties and leaving them vacant longterm, with an eye to selling them later at an inflated price - with rental income being not worth the hassle.

Some people have suggested a tax on vacant properties to give more incentive to rent them out.

Good idea, but I say we go one better.

  1. Put a hefty tax on all properties that aren't owner-occupied.
  2. Give a rebate for renting them out, proportional to the percentage above or below the average rental for comparable properties.

If you charge above-average rent, you get a small rebate.

If you charge average rent, you get a medium rebate.

If you charge below-average rent, you get a large rebate. This could even exceed 100%, using the funding from the other categories.

People chasing the large rebate will drive the average down over time, ate viola, we have a race to the bottom and the consumers reap the benefits.

There's probably a dozen reasons why this wouldn't work, but I like it anyway.

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[–] fine_sandy_bottom@aussie.zone 0 points 9 months ago (2 children)

Do you have any data about investors leaving properties untenanted because it's "not worth the hassle"?

I'm an accountant. I've never seen or heard of an investor doing that. Your costs are similar whether or not the property is tenanted. If you're paying for or holding the house it doesn't make any sense not to rent it.

[–] TheBananaKing@lemmy.world 3 points 9 months ago (1 children)

Primary sources, no - just a lot of people talking about it everywhere I go.

Certainly there seem to be vastly more dwellings than households - why do you think that is?

[–] fine_sandy_bottom@aussie.zone 0 points 9 months ago

I don't really know what you mean by that - vastly more dwellings than households.

Think through it logically, if you owned a house, paid for everything, why would you forego the $30k, $40k, or $50k rent? The answer is simply that you wouldn't.

As I said, I work in this space. There's no hidden cache of empty houses.

Aside from a few isolated cases of offshore investors it's not really a thing.

[–] Thisfox@sopuli.xyz 1 points 9 months ago

I have lived in apartments in Western Sydney and in Newcastle that had less than half the apartments in the block tenanted.... yet none advertised. I do not know the motivations of the owners. But it is quite common, in my experience. Perhaps they have no one pass through their doors for six months at a time or more for another reason, but I cannot think of one.