Less than one in 10 renters impacted by COVID-19 were granted rent reductions

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on August 06, 2020
Less than one in 10 renters impacted by COVID-19 were granted rent reductions

Photo by Sandra Lemming on Unsplash

Fewer than 10% of renters who lost income thanks to coronavirus received a satisfactory rent reduction, new survey data shows.

Better Renting surveyed almost 1,000 renters from across Australia between 29 April and 15 June, and found over three in five renters (63%) reported losing some or all of their income due to the pandemic.

Of those who lost income, 50% asked for a rent reduction but only 9% received a satisfactory rent reduction

Better Renting's data suggests that those that did ask for a reduction often received little support, with about half receiving no reduction, or a trivial amount, and about one in five were offered a rent deferral.  

Buying a home or looking to refinance? The table below features home loans with some of the lowest variable interest rates on the market for owner-occupiers.

Lender

Variable
More details
UNLIMITED REDRAWSSPECIAL OFFER
  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
UNLIMITED REDRAWSSPECIAL OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
Variable
More details
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES
  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
Variable
More details
ZERO APPLICATION FEESFEE FREE OFFSET
  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
  • No upfront or ongoing fees
  • The shorter your loan, the less interest you pay in the long run.
ZERO APPLICATION FEESFEE FREE OFFSET

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
  • No upfront or ongoing fees
  • The shorter your loan, the less interest you pay in the long run.
Variable
More details
AN EASY DIGITAL APPLICATION
  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
AN EASY DIGITAL APPLICATION

Neat Variable Home Loan (Principal and Interest) (LVR < 60%)

  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
Variable
More details
NO APPLICATION FEES
  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
NO APPLICATION FEES

Yard Home Loan (Principal and Interest) (LVR < 80%)

  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
Variable
More details
NO UPFRONT OR ONGOING FEES
  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
NO UPFRONT OR ONGOING FEES

Owner Occupier Accelerates - Evaporate (LVR 60%-70%) (Principal and Interest)

  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
Variable
More details
NO UPFRONT OR ONGOING FEES
  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
NO UPFRONT OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 80%)

  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
Variable
More details
UNLIMITED EXTRA REPAYMENTS
UNLIMITED EXTRA REPAYMENTS

Basic Home Loan (Principal and Interest) (LVR < 60%)

    Variable
    More details
    EASY DIGITAL APPLICATION
    EASY DIGITAL APPLICATION

    Neat Variable Home Loan (Principal and Interest) (LVR 70%-80%)

      Variable
      More details
      $0 APPLICATION FEE
      $0 APPLICATION FEE

      Budget Home Loan (Principal and Interest) (LVR < 80%)

        Variable
        More details
        100% FULL OFFSET ACCOUNT
        100% FULL OFFSET ACCOUNT

        Offset Package Home Loan (Principal and Interest) (LVR < 60%)

          Variable
          More details
          LIMITED TIME OFFER
          • Fast turnaround times, can meet 30-day settlement
          • No ongoing or monthly fees, add offset for 0.10%
          • Extra repayments + redraw services
          LIMITED TIME OFFER

          Smart Booster Home Loan Discounted Variable - 1yr

          • Fast turnaround times, can meet 30-day settlement
          • No ongoing or monthly fees, add offset for 0.10%
          • Extra repayments + redraw services

          Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of June 25, 2022. View disclaimer.

          “I have no idea how we would ask for a rent reduction. We are on a month to month lease and are already worried about eviction, as it has been on the cards for some time," one such renter, Jasmine from Victoria, said. 

          “Anticipating that the request would be knocked back we did not even consider making the attempt," another unnamed renter in NSW said because it would not be worth it. 

          One renter, 'Wanita' from Western Australia, asked for a reduction, but was only offered a trivial reduction. 

          “(We) Let the landlord know that due to the events we could only pay so much….They offered a $5.00 a week rent decrease,” she said. 

          Inequality made worse

          The coronavirus crisis has pushed many renters into hardship, with Better Renting's survey finding 16% had resorted to skipping meals to save money, while nearly half (44%) said they struggled to pay rent and bills. 

          According to Better Renting Executive Director Joel Dignam, coronavirus has made housing market inequalities worse, with high rents pushing more and more people into poverty. 

          “It’s a terribly stressful situation for renters. For most renters, having an eviction notice land in the letterbox is their worst fear," he said.

          "Many tenants who are out of work and out-of-pocket due to the coronavirus crisis face dire circumstances if eviction moratoriums are lifted in September and October.”

          [Read: Unit rental prices see largest fall in over 15 years]

          There has not yet been any news as to whether the initial six-month eviction moratoriums announced by the Morrison Government in late March will be extended, although Victoria is reportedly considering it in the wake of stage four restrictions being implemented.

          However, this hasn't stopped all evictions.

          The New Daily recently reported that eviction notices are still being issued across the country.

          “Australia was in the grip of a housing affordability crisis before the pandemic hit. Rental costs have been rising faster than wages for decades, now many renters find themselves spending more than 50% of their income on rent," Mr Dignam said.

          “With so few landlords giving rent reductions, and so many renters losing income, we are worried about a situation where renters are getting into debt and possibly losing their homes.

          “The survey shows renters are worried about what happens next if JobSeeker is cut in September or if bans on evictions are lifted.

          "We call on the Federal Government to keep the current rate of JobSeeker so renters aren’t pushed into poverty."

          While many people have been adversely affected by the COVID crisis, studies show those who rent are particularly worse off. 

          Analysis of data from the Australian Bureau of Statistics (ABS), Australian Taxation Office (ATO) and the Productivity Commission by The Conversation found 2.5 million Australian households rent privately, and just over half are in the bottom 40% of households by income.

          About one-third of renters meanwhile are low-income households paying more than 30% of their income in rent - and that was before COVID-19 struck.

          Now, the most recent unemployment data shows a 7.4% unemployment rate in June, which could rise to 10% by the December quarter. The most hard-hit sectors, like retail and hospitality, mainly employ younger Australians and renters. 

          JobKeeper and JobSeeker deadlines have been extended but the payment will be reduced, and Australian Council of Social Service (ACOSS) CEO Dr Cassandra Goldie has also called for the government to scrap the proposed decrease.

          “The decision to reduce the JobSeeker Payment in September will hurt millions of people just keeping their heads above water. It means from 25 September, a person on JobSeeker will lose $300 per fortnight or $150 per week, and face the prospect of a further cut just after Christmas," Dr Goldie said.

          “People need financial security and certainty at this anxious time. Today’s announcement gives them neither.

          “This decision will also have flow-on effects across the entire economy. Millions of people will have less to spend on the essentials in local businesses, which in turn could lead to further economic pain and unemployment."

          Need somewhere to store cash and earn interest? The table below features introductory savings accounts with some of the highest interest rates on the market.

          Lender

          4000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

          Online Saver (Amounts < $499999)

            02000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

            PremiumSaver (Amounts < $250k)

              3000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

              Serious Saver (<$1m)

                0100$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

                mySaver < $50k

                  4001$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

                  WebSavings Account (New Customer) ($2,000+)

                    Rates based on a savings balance of $10,000. Sorted by total interest rate. Refer to providers' websites for bonus rate conditions. Note that the base rate will apply once the introductory term has passed. Rates correct as of June 25, 2022. View disclaimer.

                    What needs to be done?

                    Better Renting's report, 'Rent due: renting and stress during COVID19', offers four recommendations:

                    • Keep the rate of JobSeeker;
                    • Implement the measures in the National Statement on Renting and Coronavirus*;
                    • Abolish unfair evictions; and
                    • Invest in social housing

                    "With these changes, we can enable more renters to occupy homes that are stable, affordable, and healthy," the report said. 

                    "In times of crisis - and in normal times as well - this will make the Australian community safer and more resilient. We can and must improve conditions for people who rent their homes."


                    *On 18 June 2020, an open letter was sent to members of the National Cabinet calling for more support for renters, signed by over 70 organisations. It calls for measures to:

                    1. Stop evictions for rental arrears or where the tenant is not at fault;

                    2. Support renters to terminate an unaffordable rental contract;

                    3. Require binding arbitration where a landlord and tenant cannot agree on a rent reduction;

                    4. A temporary freeze on rent increases;

                    5. Direct financial support for renters who would struggle to afford even reduced rent; and

                    6. A requirement for banks and insurers to offer genuine relief to those landlords who have reduced rent.

                    Disclaimers

                    The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

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                    William Jolly joined Savings.com.au as a Financial Journalist in 2018, after spending two years at financial research firm Canstar. In William's articles, you're likely to find complex financial topics and products broken down into everyday language. He is deeply passionate about improving the financial literacy of Australians and providing them with resources on how to save money in their everyday lives.

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