If you’re feeling overwhelmed by a rent increase, you’re definitely not alone.
The truth is, rental prices in the Greater Sydney area have been skyrocketing, with a 19.2% increase in median rental prices over the last 12 months. But if you find yourself faced with a significant increase from your landlord, don’t panic just yet. It’s essential to take a step back and evaluate whether the increase is fair before you respond.
How to know if a rent increase is fair
One way to assess the fairness of a rent increase is to research the median rent price. You can do this on Realestate.com.au and drill down to your suburb and specific property type. For instance, four-bedroom houses in Liverpool have experienced a 14.5% increase in rental prices over the past 12 months, with a current median rent of $690 per week (as of March 2023). By comparing your current rent to the median rent, you can gain a better understanding of whether the proposed rent increase is reasonable or not.
Next you can look at what is available on the market and compare your property to similar ones for rent in the same area. Keep in mind that these websites may only show the best features of a property, so try to be impartial when evaluating the properties. It’s essential to consider factors like location, size, amenities, and condition when making a comparison.
Another aspect to consider is when you last had a rent increase. Landlords who hold off on increasing rent may think they’re doing their tenants a favour, but this often leads to a shock when they eventually do raise the rent. Therefore, it’s important for landlords to stay on top of the rental market and make sure any increases are reasonable and in line with current market trends. A good estate agent is instrumental in this process. For instance, at Prudential, we have a comprehensive program that includes monitoring the market and making recommendations one month before a renewal. This ensures that tenants are not caught off guard by sudden and significant rent hikes.
It’s also essential to understand your rights as a tenant. In New South Wales, landlords can only increase the rent once every 12 months and only then after your lease expiry date. They must also provide you with 60 days’ written notice before the new rental amount starts and a rent increase cannot be backdated.
How to negotiate your rent increase
Many tenant’s don’t realise that if they feel a rent increase is unreasonable, they have the right to negotiate with their landlord or property manager.
When negotiating, it’s important to be respectful and professional. Provide reasons why you believe the increase is too high and be open to compromise. You could bring other bargaining elements to the negotiating table, for example by offering to sign a longer lease or take care of certain repairs and maintenance yourself in exchange for a lower rental amount. It’s also important to consider the costs the landlord would face when their property becomes vacant including lost rent, the cost of advertising the property and other lease costs. In your case you will need to consider the time and money you’d need to move house.
Remember, threatening to leave unless the landlord agrees to a lower rent amount is rarely the best course of action. Your landlord has the right to give you a 90-day no-grounds termination notice if relations sour, and finding a new rental property can be challenging in the current rental market. In fact, it’s not uncommon for a well-maintained property to attract as many as 10-20 applications in just a few days. Of course, this number may vary depending on the age and condition of the property.
However, if your landlord is unwilling to compromise and you feel the increase is excessive, you have the option of taking it to the NSW Civil and Administrative Tribunal (NCAT). You can apply for an order that the new rent is excessive, but this must be done within 30 days of getting a rent-increase notice.
If you’re still feeling uncertain about whether the proposed increase in rent is reasonable, don’t hesitate to reach out to our agents for some additional support. We’re here to help and can assist you in evaluating the market so you can make an informed decision about your next steps. You can contact us during office hours at;
Prudential Real Estate Campbelltown | (02) 4628 0033 | campbelltown@prudential.com.au
Prudential Real Estate Liverpool | (02) 9822 5999 | liverpool@prudential.com.au
Prudential Real Estate Macquarie Fields | (02) 9605 5333 | macquariefields@prudential.com.au
Prudential Real Estate Narellan | (02) 4624 4400 | narellan@prudential.com.au
Information referred to in this article was obtained from publicly accessible sources, including realestate.com, tenants.org and fairtrading.nsw.gov.au.
