The real estate industry is just hours away from learning how the nation will handle rent distress for residential and commercial tenants.
Due to be discussed in a national cabinet meeting this morning, the focus is expected to centre around rent relief including a possible national stimulus package to underwrite commercial rents, rates, and taxes, and could include a moratorium on all residential evictions.
The Australian Financial Review also notes tax breaks for landlords could be on the table, with the Federal Government considering tax relief in return for waiving or reducing rents as one of the possible options.
It’s clear, any announcement made by the government will affect all real estate businesses commercially, but as yet the finer details and the full impact is not known.
Across the sector, many agencies are facing tough questions from both tenants and landlords about how it will impact them.
DiJONES general manager Kylie Walsh yesterday said the industry needed clarity about what would trigger rent distress and how that would also impact landlord insurance.
“What needs to be considered is that most landlord insurance policies require a default in order to trigger payments that cover loss of rent,” Ms Walsh said.
“Also, when does tenant distress kick in? Is it level 3 COVID-19 measures, or level 4?”
Earlier this week, the REIQ noted a rent freeze for residential tenants could equate to asking over two million Australians to cover $9,516 each (on average) of unpaid rent over the next six months.
According to their calculations for the average property investor earning less than $80,000 per annum, this would represent over 30 per cent of their annual take-home pay during those six months.
“These are residential landlords, ‘mum and dad’ investors who the REIQ believes are equally at risk of losing their jobs as a result of the COVID-19 pandemic,” the REIQ said.
Elite Agent will bring you a full update once the national cabinet meeting has concluded later today.