Rent increase

Time for a whinge.

Last Friday I received a call from my landlord’s real estate agent. It was an unpleasant surprise. Apparently the agent claims to have posted to me a notice of rental increase over 5 months ago, to take effect from 31 May. I was unimpressed by the efficiency of the young man in question whenever I dealt with him, and he seems to have been “let go,” so I have my doubts. I certainly don’t recall receiving the letter, and I am a postaholic so far as checking the mail is concerned.

My landlord has sent me the paperwork, including the ledger which ostensibly records the posting of the letter and the depressing statistic that I have paid the landlord over $100,000 in the 6 years I have been here.

But apart from the question of whether I would now need time to apply for an order that the rent increase is excessive, the question is: is it?

The increase is 12.3% The last increase was about 8 months earlier. By my wonky maths, if you assume such conduct may continue, that is an annual rate of increase of 18%. This is an infinitely regressive game, but for completeness, the previous increases I can track down were 3.1% in 7/05, 3% in 7/06, 4.4% in 3/07 and 2.8% in 10/07.

From the Rental Bond Board’s quarterly report based on bonds lodged I find that rents for 3-bedroom “all dwellings” in Marrickville LGA increased by 5.1% in the June quarter, and 14.5% over the previous 12 months.  There are figures for units and also figures for “separate houses” but it appears from the figures on total bonds lodged and held (table 7) that the number for “all dwellings” in Marrickville includes amost as many dwellings again as flats and “separate houses” combined.  This could be because people lodging bonds for semi-detached or terrace houses don’t think they count in either category.  (Does this also mean that there are a lot of dwellings which slip betwen the cracks on numbers of bedrooms?) 

The figures for units (table 4) are 3% and 13.3% respectively, albeit that 3-bedroom units are something of a rarity, and for separate houses (table 3) they are 10% and 25%.  Some support for my theory as to what is meant by a separate house is lent by the very healthy rents quoted in that category, which are way above my house’s price-bracket even at the bottom quartile.  It seems reasonable to suppose that a semi or any dwelling at my price level (it’s a shabby house with some conspicuous defects though of course I appreciate its charm) will sit somewhere between those figures.  That leaves things in a grey area: 18% is well over 14.4%, though there is still that 25% figure looming at the other end in terrorem.

But all of this talk may well be academic.

Table 7 shows that while the total number of bonds held for Marrickville LGA has increased by 0.1% in the quarter and decreased by 0.1% over the past year, the number of new bonds lodged has decreased by 8.2% from the last quarter and 2.3% annually.  The figures for the same time in 2007 are -0.1%, 1.2%, -10.3 and -8.6 (where “-” means a decrease). The quarterly change for new bonds may be seasonal, but the rental stock as a whole has contracted by over 10% over the past 2 years.

You can also find figures just for Dulwich Hill, but the numbers are apparently too small to give meaningful trends.

It’s not a good time to be looking for a new place to rent (is it ever? – well, yes it was in some ways when I moved in, as I was able to get a new hot water system by promising to stay for 12 months back in 2002), and the prospects of extracting a more favourable bargain by negotiation (let alone by rushing off to the tribunal) are correspondingly poor. In the scale of things, the $480 arrears is neither here nor there, but the increase itself can only compound with future rent hikes.

That’s not very cheering.

7 Responses to “Rent increase”

  1. The Rabbit Says:

    Time to buy.

  2. marcellous Says:

    That’s what D says. Easier said than done, though.

  3. Danny Says:

    By way of comparison my rent in Pyrmont last year was $365 per week for a one bedroom apartment. I went travelling in Alaska for the year and have recently come back to Sydney. The same apartment was up for rent again but this time it was $430 per week. That a 17% increase in 12 months!

    I ended up staying in hotels until I could find a one bedroom apartment, this time in the neighbouring suburb of Ultimo, for $410 per week. It took me two months to find a place to rent.

    I don’t know what has caused the increase but I am hearing from people that there is a significant increase in demand due to imiigration to Sydney.

    I am looking to purchase a place in next year when I’m anticipating the home market will bottom out.

    I guess my point is that it could be worse. I don’t trust that your landlord/agent are being totally genuine since it should not have taken them more than a month to notice that you have not payed the correct amount. I imagining that your agent and the property owner did not communicate very well and there is some ass covering going on.

    Enjoying your posts.

  4. The Rabbit Says:

    Don’t very important barristers earn a decent income? You could lease me a room to help pay it off. :-)

  5. Thom Says:

    In my neck of the woods in the inner west, one half of a semi-detached was rented out at for $360 a week. A change of tenants in the other half of the building barely two years later saw an asking rent of $500! (An astounding 38% jump by my calculations.) Both properties were in a nearly identical (and very nice) state of renovation at the time of advertising, so it’s not as if the cheaper property was in poor condition. Of course, I don’t know if they actually got the $500 being asked, but given the current demand and general desperation of many would-be tenants, I wouldn’t be surprised if they did.

  6. John Says:

    We’ve had a couple of agents knocking on our modest two bedroom apartment door asking if we want to rent our place out for much more than I expected. There must be a real lack of accommodation in the inner west. Although with interest rates coming down yesterday, one would think that rents should remain static for the short term.

  7. You can always blame someone else « Stumbling on melons Says:

    […] course, I have my own axe to grind. Meanwhile, discussions with my landlord about the rent increase are continuing, surprisingly cordially so […]

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