30 September 2019

A key Australian Government advisor has called for State Governments to restrict the ability of landlords to evict private renters, in a move which would give greater protection to Australia’s booming elderly tenant population.

A Productivity Commission research report issued on 26 September looks at the experiences of vulnerable people in the private rental market, including Australians aged over 65.

The Productivity Commission is the Australian Government’s economic, social and environmental policy advisor.

Only Victoria and Tasmania have acted to restrict evictions

The Commission examines the current State-by-State regulatory framework for evictions, and finds that only Victoria and Tasmania have acted to provide greater protection for tenants.

In Victoria, from July 2020, landlords will need to have a specific reason (known as a ground) to evict tenants on both periodic and fixed-term leases. These reasons could include a need by the landlord to sell, reconstruct or redevelop, or move into, the property. 

Until then, in Victoria, the landlord won’t need to come up with a reason to evict a tenant.

Similarly, Tasmania does not allow evictions for periodic leases, without a specific legislated reason being given by the landlord.

However, all other States and Territories allow landlords to evict tenants - after a range of notice periods - without having to state any specified grounds to do so.

For instance, NSW reviewed tenancy laws in 2016, but recommended no changes to the State’s legislation for ‘no grounds’ evictions, citing the need for landlords to have certainty that they would be able to regain possession of their property when they wanted.

On evictions, the Productivity Commission states that: “Reforms to prohibit ‘no-grounds’ eviction and extend notice periods for ‘no-fault’ evictions (including on sale of a property), if well designed, offer avenues for improving the welfare of vulnerable private renters.”

“Some jurisdictions have already started down this road. The arguments that favour extending notice periods do not apply where tenants have failed to pay rent, damaged the property or otherwise breached the lease agreement”.

Boom in elderly tenants

The Productivity Commission’s recommendations came amid concern about the rising numbers of elderly people entering retirement in unsecure private tenancy arrangements, because they have been unable to afford buying their own home.

A separate report by the Australian Housing and Urban Research Institute in August found that in 2016 some 14 per cent of all Australians aged 55-64 were private renters. 

By 2031, this percentage is expected to increase to 18 per cent, meaning there will be 566,693 private renters in this age group across the country (an increase of around 200,000 compared to 2016).

Similarly, the percentage of Australians aged over 65 is set to increase from nine per cent in 2016 to 11 per cent in 2031. This means that, in 2031, there will 543,433 renters in this age bracket, an increase of 264,405 from 2016. 

Government rent assistance has not risen in line with rent costs

The Productivity Commission also finds that the level of Commonwealth Rental Assistance (CRA) for private renters has not increased in line with the cost of rents, which has made it difficult for elderly vulnerable renters to handle rent hikes. 

This is because the CRA is indexed to the cost of consumer goods, rather than the cost of the rental market. 

The report finds that “CRA has made a significant contribution to improving the affordability of rental accommodation for vulnerable private renter households.”

“However, CRA’s ability to cushion vulnerable private renter households from rental price increases has diminished over time as the consumer price index — against which the CRA is indexed — has grown slower than rents.”

While the report’s recommendations may be welcome news to many elderly tenants, there is no requirement for any level of government to implement them.

"Our report on the private rental market is a self-initiated report. We aim to produce self-initiated research reports into 2-3 relevant policy issues per year," a Productivity Commission spokesperson told Downsizing.com.au.

"While we brief government prior to public release on our findings there is no formal requirement for government to respond to any of our research including self-initiated research."

By Mark Skelsey, Editor at Downsizing.com.au