Don't get me wrong… But rents are skyrocketing The narrative needs to change

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This portrayal is neither fair nor accurate.

At Metropole, we manage over $2 billion worth of property assets for our clients and I know most of them aren't greedy and in fact, very few of them are ugly.

These individuals are everyday Australians, taking calculated risks to secure their financial future.

They're the teachers, the nurses, the police officers, and the public servants-all striving to build financial security for themselves and their families.

Don't get me wrong…

I also believe all those Australians who live in rental accommodation are also good people.

Let's look at the numbers.

Nearly one in three Australians live in rental accommodation-that's about 7 million people.

Then there are the 2.1 million Australians who've stepped up to provide 91% of the rental accommodations across the country.

These figures hardly support an "us versus them" dichotomy; rather, they highlight a community of interdependence.

Each year, the Australian Tax Office releases data on property investment and a staggering 92% of investors own just one or two properties, and 72% earn $100,000 a year or less.

These aren't tycoons-they're your neighbours, your friends, your family.

The landscape of property investment is also evolving, with 107,000 investors under the age of 30.

Meanwhile, nearly 40% of tenants are over 45.

In other words, both tenants and rental providers are fundamental to each other's existence, a relationship that should be nurtured rather than hindered by government policy, especially since the governments have abdicated their role in providing accommodation for those who choose to or need to rent.

But rents are skyrocketing

The recent surge in rent is not a symptom of greed but it's related to the market forces of supply and demand which in turn are the outcome of many years of poor government housing policy.

Clearly, the immigration minister and the housing minister don't speak to each other and we're just not providing enough accommodation or infrastructure for the influx of migrants.

The criticisms aimed at property investors, particularly around negative gearing and capital gains tax exemptions, often miss the mark.

These incentives are not dissimilar to those available to all small businesses.

Furthermore, property investors contribute significantly to the nation's finances, with over $10 billion paid annually in property taxes, including land tax, council rates, capital gains tax, and stamp duty.

It's worth noting that for the decade prior to COVID, rent increases failed to keep pace with inflation, and currently, landlords are contending with their own set of challenges-rising costs and stringent compliance demands.

The increased rents can be seen as a corrective measure in response to these pressures.

To mitigate the current rental crisis, a simple, effective solution would be to offer property investors a measure of certainty and security, ensuring they are willing to shoulder the commercial risks of property investment.

In the short term, this could ease the rental shortage, and in the long term, it could empower more Australians to invest in their futures, reducing the reliance on taxpayer-funded pensions.

The narrative needs to change

Property investors are not greedy, landlords, but everyday people with a motivation to pursue financial independence.

In fact, they make a significant contribution to society in many ways.

  • They are suppliers of close to 3 million rental properties around Australia
  • They provide homes for 8.5 million people, which is around one in three Australians
  • They save taxpayers over two trillion dollars by providing rental accommodation the government would otherwise have to fund.
  • By providing for their financial futures, property investors save the government billions of dollars each year in pension payments
  • In the tax year 21/22, they paid:
    • $4.5 billion in council rates
    • $14 billion in land tax
    • $6 billion in stamp duty
    • $20 billion in capital gains tax

Property investment isn't a zero-sum game.

It's about building a stable future for all Australians, tenants and investors alike.

Let's foster a community where investment is seen not as an act of greed, but as a pillar of strength for our economic and social fabric.

Photo by Morgan Basham on Unsplash