• Property market return to normality means emergency legislation needs to end


    Property Market Return To Normality Means Emergency Legislation Needs To End | REIWA

    With the Australian Capital Territory extending the emergency period tenancy legislation for residential and commercial properties, REIWA is calling on the Western Australian government to allow the emergency period in our state to end at the current proposed time of 29 September 2020.

    REIWA President Damian Collins said that with the WA property markets returning towards normality, there was no need for the legislation to be extended.

    “The emergency legislation was introduced on the basis that the WA economy would face a far greater shock than it actually did and while we understand that the economy is certainly not as strong as it was pre-COVID, applying emergency legislation to all tenancies is not the appropriate response to those who may need assistance,” Mr Collins said.

    Residential tenancies

    During the current emergency period, REIWA members have reported that approximately one per cent of residential tenancies have been unable to meet their rent in WA.

    “For the vast majority of residential tenants who have been only moderately affected by COVID, the rental market should return to the normal supply and demand fundamentals,” Mr Collins said.

    Find out more on what the Residential Tenancies (COVID-19 Response) Act means for residential tenants.

    Impact on landlords

    “It’s not fair that owners, who in fact may be suffering more than the tenants, are not able to exercise their normal rights under the lease.”

    From a landlord’s perspective, extending the emergency period could place them in a position of increased financial hardship as they are no longer able to defer mortgage repayments, with some deciding to sell, which would further reduce rental stock available.

    “With the current vacancy rate sitting at two per cent, we can’t afford for landlords to take their properties out of the private rental market, as not only will this impact stock levels, it may also increase the median weekly rent,” Mr Collins said.

    Find out more on what the Residential Tenancies (COVID-19 Response)Act means for residential landlords.

    Commercial tenancies

    Looking at commercial tenancies, during the COVID-19 emergency period the legislation mandated agreements between landlords and tenants, which meant landlords are obligated to reduce rents in line with the tenants decline in revenue.

    Extending the current emergency period would increase the financial burden already faced by many commercial landlords.

    “Commercial landlords have worn the pain during the downturn and now that many tenants are back to normal or near normal trading conditions, it’s only fair that tenants be expected to meet their obligations under the lease agreements they have entered into,” Mr Collins said.

    “Landlords generally want to keep tenants in most instances, and I am sure that most landlords will work with tenants who need help regardless of whether or not they have legislation in place. However, moving forward and applying emergency legislation to the entire market is simply not warranted and the WA Government should let the legislation end on 29 September 2020.”

     Want to know more about the Commercial Tenancies (COVID-19 Response)Act? Find out now.