As the federal and state governments roll out measures to support the economy and the housing market, property investors appear to be ignored and left out, says an expert.
Mike Mortlock, managing director of MCG Quantity Surveyors, said the lack of support to property investors could potentially hurt the housing market and the economy.
"We do not want to discourage people from investing in residential real estate, but that’s exactly what’s happened during this pandemic," he said in a recent think piece.
Mortlock said that "disproportionate" support was given to tenants early in the crisis in the form of moratorium on evictions and rent increases, all of which are at the expense of landlords.
"The vast majority of investors stepped up and did what they could — cut rents or deferred tenant debts," he said. "There was help from the banks in terms of the six-month repayment holiday for borrowers, however this wasn’t free money."
Property investors were also left out in the schemes that are aimed at spurring activity in the housing market. The HomeBuilder scheme, for instance, was only applicable to owner-occupiers. Mortlock said this was a "wasted opportunity" to boost activity from investors.
"Investors will complete renovations and maintenance on their assets, so any assistance to encourage this would have been ideal. Not only would it have supported construction, it would have benefitted tenants with plenty of new fittings, fixtures and finishes added to rentals," he said.
Data from the Australian Bureau of Statistics (ABS) show that most Australian investors need the support just as much as owner-occupiers, Mortlock said.
In fact, of the 2.1 million property investors in Australia, 1.5 million own just one investment property.
"That means around 90% of all investors have modest holdings. These aren’t high-wealth individuals. They are mum-and-dad level landlords just looking to get ahead and plan for retirement," he said.
Western Australia is one state that is already feeling the impacts of the lack of support for investors.
According to the Real Estate Institute of Western Australia (REIWA), Perth's rental market has officially entered a crisis as its vacancy rate dropped to its lowest level in 13 years.
"Western Australia has approximately 17% of properties purchased by investors, whereas we would normally expect to see investors buying 30% or more of the available properties. At the same time, we still have investors exiting the market, meaning the supply of rental properties is not sufficient to keep up with demand," said Damian Collins, president of REIWA.
