Sunrise presenter David ‘Kochie’ Koch has called on Australians to ‘love their landlords’ amid the rental crisis and told frustrated tenants to ‘direct their anger at all three levels of government’.
In an op-ed for The NightlyKoch said landlords have been vilified for raising rents on properties across Australia, while not enough blame has been placed on the government.
Koch claims that the real reason rents are rising is “a combination of rising interest rates, a lack of new development due to a shortage of land, delays in approvals, banks reducing lending capacity and developers going bankrupt.”
“Additionally, there is a lack of commitment from governments to develop sufficient affordable, cheap rental housing,” he said.
Former Sunrise presenter David Koch has been called out by some tenants for sending a ‘love letter’ to landlords
‘It is complex and there is no silver bullet. But so-called ‘greedy’ landlords are wrongly targeted as scapegoats.
‘You probably have one in your family, or among your friends, and I bet they’ve raised the rent to cover rising loan repayments.
“But vilifying real estate investors will make the crisis much worse. The reality is that many of those landlords are now saying it’s just not worth it and they’re selling, which just compounds the problem.”
Koch argued that landlords and property investors are Australia’s best chance to survive the rental crisis, which has sent rents skyrocketing across the country.
“The supply of rental properties ultimately depends on whether investors buy a property and then rent it out,” he says.
‘For that to happen, the property must generate returns, making it worthwhile for the investor to choose property over shares, term deposits or any other alternative.
“If it’s not worth it, investors will go elsewhere, and that’s their right. That only increases the crisis.’
There are 2.2 million landlords in Australia; of those, just over 71 percent own one investment property and 19 percent own two, according to the Australian Taxation Office.
“They’re not property magnates, they’re ordinary Australians trying to build a nest egg,” Koch said.
The TV presenter pointed to figures showing landlords are selling their investment properties at high rates, a sign that many think renting is ‘just not worth it’.
“The only way to solve the rental crisis quickly is to love your landlord and encourage more real estate investors to make more shares available,” Koch said.
He also criticized the government for letting private investors do “the heavy lifting” in building enough new homes to meet demand.
Koch claimed the federal government’s $10 billion Housing Australia Future Fund, which will provide 30,000 social and affordable homes, is “small compared to what is needed”.
“This lack of commitment from governments to solve the rental crisis has been going on for decades and we have been shockingly negligent compared to the rest of the world,” he said.
Debate heats up: Australians are divided over Kochie’s views on landlords
However, his sympathy for landlords fell flat on the ears of Aussies struggling to keep up with their growing bills.
“The government is not trying to foot the bill for emergency repairs on its own, or trying to pass those costs on to the tenant at the tenant’s expense,” one person said.
“My brother, this is the world your generation created,” wrote another.
“Sorry, they’re not regular moms and dads; they are greedy people who try not to pay income taxes. And we subsidize them. Shameful,” a third added.
A fourth said: ‘Another out-of-touch millionaire broadcaster. The rental crisis is real and affects normal people who don’t make millions a year. Don’t comment until you’ve walked a mile in someone else’s shoes, Kochie.’
Finding an affordable rental home has become a lot more difficult now that the national vacancy rate has fallen to a record low
A fifth wrote: ‘Those who have borrowed too much and cannot cope with a few percent interest rate increase are making their tenants pay. That’s not fair or decent.’
However, many others showed their support for landlords and called on the government.
‘Why bring over half a million immigrants to Australia if there weren’t enough houses for people here in the first place? It’s a total disregard for the people who live here,” one person said.
Another added: ‘Tenants are useless; they can’t even remove a plug from the sink or connect a hose to an outside tap without calling for help.”
A third said: ‘I’m a landlord and have been for about 30 years. After paying all expenses, I am fortunate to earn 1.5 percent on my investment.
‘I have to pay council rates, water rates, insurance, bank interest, repairs and maintenance, safety audits, estate agents’ fees, accounting fees, income tax on positive equity properties and land tax. I’m sure I missed a few.
‘Since I have a few properties, the land tax is killing me! It can rent for as long as two to three months! The only way to make money from real estate is to SELL it and pay capital gains if you have owned the property for more than ten years.”
Rental vacancy rates are falling to a new low
Australia’s rental market tightened further in February, with the national vacancy rate falling to a record low of 0.7 percent.
Economist and report author Anne Flaherty says the situation is unlikely to improve in the near future.
“Circumstances are currently very difficult for tenants,” she told AAP.
‘The fact that the population is growing, that the supply of new housing is slowing – what this implies is that we are not going to see a change in these conditions anytime soon.
“I think it could get worse than it is now.”
Landlords are also increasingly withdrawing their homes from the rental market, because the associated costs have risen and they are not always covered by steep rent increases.
“For some of them, the math doesn’t add up anymore and they’re sold out,” Ms. Flaherty said.
While this is good news for those looking to purchase homes, it reduces the rental inventory.
“The reality is we need more rental housing,” Ms Flaherty said.
“A third of Australians are renters and new Australians are likely to be renters too.”
Although governments could help tackle the rental crisis by increasing rental subsidy schemes, there are virtually no other solutions that can tackle the problem in the short term.
And plans to increase housing supply require years of planning and construction.
“There’s no one silver bullet,” Ms. Flaherty said.
‘Governments must work together to explore all options to increase housing supply – not just increasing affordable housing, but also facilitating build-to-rent developments, making it feasible to remain a real estate investor and working to address the barriers for the development of new homes.’