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How will the new rental assistance budget set affect property investors? 

How will the new rental assistance budget set affect property investors? 

How will the new rental assistance budget set affect property investors? 

As part of a package of budgetary measures, the Albanese government has increased the fortnightly rental assistance budget by 15 percent. This means that more than 1 million Australians eligible to receive the payments will have an increase of 31 dollars per fortnight, they also expanded the eligibility criteria for federal government housing guarantee schemes. These were both measures taken by the Labour government to make renting more affordable for people struggling to keep up as the cost of living price rise. Evidently this is beneficial to those households eligible to receive those payments, but it could also beneficial to property investors.


This new government spending needs to be seen as an opportunity, if you were looking for one more reason to invest in the property market this is it. 

As a landlord there is now a decreased risk to leasing your home as the tenancy default rates will lower, people struggling to keep up with rental payments will now find 15% more money in their budget for the pure purpose of rent. Additionally it will reduce vacancy rates, as tenants who are receiving rental assistance will be more inclined stay in their rentals for longer periods of time. This will help to reduce the costs associated with tenant turnover, advertising and cleaning fees as an example. 


This is also due to effect the number late home leavers. It is said that 56% of young adults (in NSW) are still leaving with their parents. As the property market continues to increase the more unrealistic it has become for young people to be able to move out of home afford rent comfortably, therefore school leavers have opted to living with their parents as the cycle of rental payments and affordability crisis has continued to develop. This extra money to the budget may be what it takes for these young adults to leave their parents home, they is no question whether they want to or not, it is whether they can afford it or not. 


This extra 15% is the largest increase to the Commonwealth Rent Assistance budget in more than 3 decades, vacancy rates are already low hence the the rental yield expectations throughout the nation, especially in major cities. With the new immigration rules passed and set to come into effect 2023/2024, some keen Australians are impatiently awaiting the arrival of the 190,000 immigrants to this country as they are about to benefit their households finances. There has to be a way to house this influx of people to Australia, if you want to take advantage of these new rules you may want to consider buying a property.

As a domino to the change in budget and change in immigration rules, we are likely to see an increase the amount of rent that a property investor can charge, as tenants who are receiving assistance are more likely to be able to afford higher rents now and the rise in population will create more people competing for these residential rental properties.

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