Today, to attract the attntion of the readers, we are using this photo above. Now this property is not for rent, and perhaps it will never be for rent. We do not know who owns it, but very likely is a rich owner that lives in it. But there is nothing wrong to look at it, and wish you can have something like this one day. We hope you see what we mean.
Welcome to our article,
Dear readers, I want to inform you that I
have followed the rental market for a long time, and I have written several
articles about it, pointing out what I think needs improvement. I have done
that, hoping that someone in power takes notes of what I am saying, and does
something about it, but so far nothing has happened. Anyhow, I will continue to
write more article, hoping that something positive happens, so, let me go on
writing.
Today in Australia, there are less properties
for rent, and this is causing problems to people that are renting. So, we want
to look at the reasons why this shortage is happening, because in the past,
rental properties somehow found their own balance, and this problem was less acute, so to
speak.
Now, if we want to know why this is
happening, the best way is to do it, is to look at what is changed and how the whole country is
supposed to be run, and then, when we find the reason that has caused the
rental shortage, we can suggest what could be done to fix it.
I suppose that if you have had something to
do in renting a property, you can already guess, what the reasons of this
rental shortage are. But here we need to look at those reasons closely, to make
sure that what we are saying is correct.
So, let us look at how the Australian economy
is run. Australia is a free democratic country, and the economy is run freely
from all individuals. Now what happens in a free economy, is that all
individuals are free to do what they want, but at the same time they are
competing with other individuals that do the same thing, so, the price becomes
set from the supply and demand market, and those individuals that are competing
to sell the product they produce.
Of course, whatever business you are in and
whatever you sell, you need to make some money to be in business, if there is
not enough money the business you are running cannot survive, and you are
forced to close whatever you are doing. I am saying this because, this is what
happens in a capitalist economy. And this is good because the economy finds its
own ways how to set the price and survive. But there are times, when things do not run the
way they are supposed to run, and this will create problems, like the problem we are
having now with rental properties, so, let us look at what is happening,
because there is always a way how to improve the situation.
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Now let us look at rental properties.
Having said that Australia uses a capitalist
system to run the economy, now let us look at what is happening in the rental
market, and why today there are not enough properties for rent.
Now what I am saying hereunder is the way that I
remember. I remember this well because I have followed the rental market during
my life, so, I remember that rents have always gone up, just like everything
else. This was until the year 2010 or so, and since the year 2010 rents have
not gone up as much as everything else, so, today rents need to go up, to reach
the level where investors think that they can run a rental business without
losing money. But the people that are renting do not see this need, and they
think that they are paying too much rent already. Perhaps thy are used to cheap
rentals, and now the rents are going up, so, they are complaining about it, and
they say that they cannot afford to pay the rent. So, this rental problem is
becoming a huge problem, and nobody seems to have a lasting solution.
Today, some political parties want to freeze the
rent, others want to put a ceiling how much the rent can be increased, the
present government want to build lots of affordable rental run from the
government, and many other things. The only thing they are not talking about,
is why there are not enough affordable rental properties on the market. So, let
me explain what the reasons are.
I start believing that the reason for this
rental shortage, can be attributed to the failure of the past governments for not
making balanced laws for rental properties, and charging the present property
owners high levies, without thinking the consequences.
You see, properties owners can be said that
they are running a service for the community, and if you run a service, you
must make some money, otherwise you are forced to close. Here we can say that
this is what has been happening, and for this reason, today there are not
enough rental properties on the market. We can add here that a democratic capitalist
country, will always find ways how to supply what needs to be supplied, unless
there are laws that stops them earning enough money to run their business.
Here I must say, that if the government in
charge want to solve the rental problems, they must make better laws that aim
to help to property owners to balance their housing business better. If they do
that, then in a few years there will be enough housing on the market, and the
problem is solved.
I suppose that I need to explain this better, but I believe that this article is becoming too
long, so, to explain my point of view I will write more articles. But before I
sign off, I want to say what I have noted. So I say, that to start improving the rental situation, the government
of the day, could start abolishing the ASSETS TEST on affordable rental
properties, because the assets test scares off most small investors, that could
otherwise have a property for rent.
To see more click on this link, Housing Problems in Australia, Article One.
See you next time.
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