Burning landlords “freaking out”

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Via the AFR:

Residential property landlords are facing a new setback as insurers refuse to cover shortfalls resulting from agreements with tenants to reduce weekly rental payments, despite pleas from the federal government for negotiated agreements.

Major insurers, such as Aon, are also warning they will not provide cover where the landlord and tenant mutually agree on a suspension of rental payments, which might happen if tenants lose their jobs, or losses caused by not being able to find a new tenant.

“This is killing mum and dad investors who have purchased investment properties,” warns Patrick Bright, buyers’ agents and director of EPS Property Search. “Owning rental properties is a business for many people but they are being given no support from the government. Landlords are freaking out.”

Mums and dads my butt. These are tax-subsidised speculators that are happy to arbitrage youth. To wit:

Landlords are rushing to throw out tenants who have lost their jobs and cannot pay their rent due to uncertainty over a government ban on evictions, a group representing renters in Victoria says.

Renters were relieved when Prime Minister Scott Morrison announced a six-month moratorium on evictions due to the coronavirus crisis, but there is no ban in Victoria yet.

Tenants Victoria chief executive Jennifer Beveridge said the lack of clarity was causing landlords to rush to protect their own interests out of fearcomparing it to the panic buying of toilet paper.

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Arrest them. If they can’t take the heat then landlords should sell the property.

Some support for renters is forthcoming in NSW:

The Berejiklian government’s plans for residential rent relief will include deferring or even waiving land tax for landlords on the condition they pass on the savings to tenants.

NSW Treasurer Dominic Perrottet said the states had been working on ideas for rent relief following this week’s national cabinet meeting.

“Offering a degree of land tax waiver or deferral for landlords is something we are finalising,” Mr Perrottet said.

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How will they police that? What odds the landlords keep it and kick ’em out anyway? Pay it directly to renters for heaven’s sake.

Let the landlords burn.

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.