News & Media

November 2017 Newsletter

NO-FAULT EVICTIONS IN THE SPOTLIGHT  

The issue of no-fault evictions has been a hot topic in recent weeks, with the NSW Labor Party announcing that if it wins at the next election (2019) it will introduce changes to improve the rights of more than two million tenants. The measures include:

  • Scrapping the 90-day no-grounds eviction
  • A default minimum 12-month rental agreement
  • Option for leases of up to five years

Following Labor’s announcement, the state government reaffirmed that it is looking at new rental measures, promising to legislate in the new year to improve renters’ rights and security.

Matt Kean, the Minister for Innovation and Better Regulation, said the government was “looking at all options to better safeguard the rights of renters across this state”. The government, he said, has been developing a package of legislation initiatives that would be introduced into parliament in the new year.

”No-grounds evictions, retaliatory evictions, all these things are currently undermining renters' rights in NSW," Mr Kean said. "We want to make life fairer and better for renters in NSW. "We're currently working on a comprehensive plan to provide renters in NSW with more rights."

Reforms under consideration include making the fees associated with breaking a lease fairer, improving tenants’ rights to access repairs and maintenance and better disclosure of lease conditions prior to signing.

It’s an issue that is of interest to both tenants and landlords. A 2017 survey by consumer group Choice found that renters lived with widespread anziety, with one-in-five fearing eviction and nearly 10 per cent being evicted on a "no grounds" basis at least once.

The Property Owners Association (POA) of NSW is open to change but is cautious about what is being proposed, citing the fact that in recent years landlords have been faced with a number of new regulations, including health and safety compliances.

“The old assumption that a tenant is lesser well off than a landlord is incorrect, there are actually some tenants financially better off than landlords,” POA President John Gilmovich told abc.net.au.

 

SYDNEY TO BE SPLIT IN THREE  

The NSW government has released a 40-year strategy to divide Sydney into three separate cities by 2056. The brainchild of Lucy Turnbull, the head of the Greater Sydney Commission, the plan includes harbour-side city in the east; a central river city around Parramatta; and a parkland city west of the M7. The strategy, titled Towards Our Greater Sydney 2056, updates the existing A Plan for Growing Sydney.

“Reshaping Greater Sydney as a metropolis of three cities – Eastern, Central and Western – will rebalance it, fostering jobs, improving housing affordability, easing congestion and enhancing our enviable natural environment across the entire region,” Ms Turnbull said.

The commission’s report has been described by Ms Turnbull as a “landmark” blueprint, as Sydney moves towards accommodating six million people in 20 years (up from the current population of 4.8 million), and eight million by 2056 (when the three cities will be rolled out).

Under the plan, all three city centres would be linked by public transport and people in eastern, central and western Sydney will be 30 minutes away from work and services.

There are 10 ‘directions’ in the plan, including a “city for the people”, which lists objectives such as “Greater Sydney’s communities are culturally rich with diverse neighbourhoods”, in addition to “valuing green spaces and landscape”, plus “the coast and waterways are protected and healthier” and “urban tree canopy cover is increased”

Forthcoming strategic plans from the Commission, Transport for NSW and Infrastructure NSW, which will be released in 2018, will also reflect the Three Cities vision.

 

SOFTER SYDNEY MARKET - BUT NOT FOR LONG  

SQM Research’s Housing Boom and Bust Report 2017 has forecast Sydney’s median home price will finish this year at about 6-8 per cent higher than it was at the end of 2016. According to the report, the median will then increase 4-8 per cent over 2018, largely due to growth in the second half of the year.

It means that 2018 would be a reversal of this year, when the strongest price movements were at the start of the year and more muted conditions set in over winter and spring (in certain areas, but obviously not all).

According to Louis Christopher, SQM Research director, the banks’ restrictive lending policies to investors were driving the current slowdown and would determine whether prices grew again in 2018. “Sydney will record a soft market in the first half [of 2018], but property prices will start to recover in the second half as the banks will likely increase investment lending once again,” Mr Christopher said.

He said the market was a “repeat of the second half of 2015”. In late 2015, prices fell but soon picked up again in 2016, posting another $100,000 in house price growth in the months since.

 

Market Forces

These outlooks could obviously change dramatically should there be an increase in interest rates. And any further changes from the Australian Prudential Regulation Authority (APRA) could also alter the market.

In a domain.com.au article, Mr Christopher said that “APRA’s action, which came earlier than I had expected, has meant that the Sydney housing market is cooling sooner than expected”. He said this had left SQM’s previous forecast of 11 to 16 per cent growth too bullish compared to a likely 6 to 8 per cent result for 2017.

“The authorities were right to take action earlier this year to restrict investing lending by banks,” he said. “Failure to have taken action would have resulted in out-of-control Sydney and Melbourne housing markets, where additional aggressive monetary policy may well have triggered a large fall in dwelling prices in 2018.”

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