This morning I was running late to work because I had to clean the shower. Cleaning the shower is my most hated household chore and I was doing it this morning because we have an open home tomorrow morning. Even with both Matt and I splitting jobs, there won’t be enough time to clean the whole house, feed the kids breakfast, get a load of washing on and out and get the next one in and participate in the park run before 9.30am when we’re kicked out of our rental property so potential buyers can mosey through our life at their leisure.
We have been having open homes like this every second weekend for the last 8 months. Every two weeks I get a text from the real estate agent asking if he can open our home that saturday. He used to call and make small talk about what was happening in the rental market and encourage us that we’ll hopefully get an investor who will want to keep us in. He did that for the first 10 open homes maybe, now he just flicks a text.
“Hi Jess. Just requesting the possibility of an open on Sat at 10?”
“That’s fine.”
“Thanks you are so great with tour help”
He doesn’t even bother to check for typos any more.
I imagine from his perspective, our home is a real ‘pain in the arse’ account for him. The landlords are shits who don’t want to spend a cent doing the house up but are still demanding top dollar which is pretty much why no one has brought it.
What I find most annoying is that every time he flicks me that text, he’s thinking, god, just someone bloody buy it so we can get these lunatics (landlords, not us) off our books. What I like to imagine is that every open home is another roll of the dice. Another opportunity for someone to potentially buy our house and maybe / maybe not want us out.
I read in the paper this week that old mate Albanese sent an eviction notice to one of his long term tenants asking him to leave his property so AA could sell his house. ‘Situations have changed’ and Albanese is ‘well within his rights to sell the property’ and of course he is. I think that's the shitty part about it. All of this is completely fine and very matter of fact.
Person buys a house as an investment. Person reaps huge tax benefits through negative gearing while managing investment. Person wants that investment back along with any gains so they sell said investment. More money made by people who had money in the first place. Business as usual.
The flip side of that scenario is people who can’t afford to buy a house let alone an investment property. Once a place is found that is suitable and fits the budgets (yet to find both in the same location!) They have to give over ALL of the personal details including employment history, income, personal references, dependants and pets to the anonymous and never named landlord to be assessed for suitability.
Landlords only have to give 14 days notice for an intention to sell. The house can be sold with a lease attached but the new owner has no obligation to honour that lease if they don’t want to. Shit, I’d want to move in straight away if I’d just bought a house. Or maybe there is an investor which just repeats the same cycle of the rich getting richer.
In our case, our landlords were given some very poor advice to invest in property when they didn’t have the money to pay for the servicing of a house that was a doer-upper at best. With increasing interest rates our house is now costing them money since you can’t charge Melbourne rental prices in Ballarat - although we’ve had many rent rises during our lease. The latest one being when they sent an ‘Increase in rent’ letter a week after we received the ‘intent to sell’ letter - Jerks.
Most economies around the world have housing as a part of a larger ecosystem. Australia is just one big fat housing market which is why we’re in this pickle of a housing crisis now. In places like Switzerland there are restrictions for owning multiple homes and tax incentives for holding onto investment properties for as long as possible. In Australia, the more properties you own the more tax you can write off against them. The government essentially incentivises property ownership.
In data released by the ATO in June 2023, around 2.24 million taxpayers in Australia are property investors and collectively own 3.25 million investment properties.
Of those investors:
71.48% hold 1 investment property
18.86% hold 2 investment properties
5.81% hold 3 investment properties
2.11% hold 4 investment properties
0.87% hold 5 investment properties
0.89% hold 6+ investment properties
Now, just for a second, a split second, imagine that the government said that you couldn’t own more than one investment property. Like Switzerland. If we kept the 71.48% of investment properties in the rental market but released all of the houses that were investment property number 2, 3, 4, 5, 6 that would flood that market with nearly 1 million houses (926,900 to be precise).
House prices would drop drastically - nearly 1 million people who couldn’t afford houses might be able to afford a house! There could be 1 million less households renting which means that having more than one investment property probably isn’t a smart investment any more.
Imagine that - imagine if people just kept their piles of cash in the bank and not in other peoples homes? Reaching the government target of 1.5 millions homes in the next ten years might have a fat chunk taken out of it.
It’s fun to imagine.
Now please appreciate that I’m a graphic designer and not an economist so my interpretation of this data is far from what would actually happen. I also love lots of people who do have investment properties - I don’t love you any less! I think the purpose of my rant this morning is how ubiquitous property investment is in Australia and behind all the figures and dollar signs there are MILLIONS of people and families like ours, patiently waiting to see where the dice lands.
