You might have seen the headlines this week of a landlord threatening and preventing the tenant from leaving until he paid up. (E.g. ABC coverage “NSW Police charge Sydney landlord who allegedly held tenant who couldn't pay rent hostage”).
While physical threats take it to an extreme, I hear many serial renters say, what’s new? After all, we’re already locked in a one-sided contractual agreement that favours the rights of the asset owner. How many tenants are being ‘held hostage’ by their landlords over the release of the bond at the end of the lease? Keep up with their lessor invading their privacy and refusing to carry out repairs? But I’m digressing.
Sydney's private rental market is going through massive price correction
The real story here is one of rising fear among private property owners as rental vacancies are rising and rents are plummeting across Sydney. Already, the percentage of private investors planning to sell has risen from 8 to 12% (see AFR: Investors sell up as rental stress rises).
This happens against a backdrop of mum & dad investors pushing into the private property market and driving up prices in places like Sydney. About 20% of Australians owned an investment property in 2019. 83% of them are small scale investors who rely on their job for income and have a few investment properties on the side to pay for holidays and their retirement (The Conversation: Three charts on: who is the typical investor in the Australian property market?)
Landlord anxiety on the rise
A collapse of the residential property market could send a seismic shock wave through the economy. Even the level-headed Reserve Bank of Australia is getting nervous. So much that is was considered to stop the release of property data during the COVID-19 crisis to hide the real extend of losses (ABC).
Coming back to our average landlord, it’s important to remember that aggression as a behaviour is closely linked to anxiety. The way things are heading, tenants are more exposed than ever to their dethroned overlords who feel entitled to rule over their property kingdom and its subjects.