An uninhabitable Sydney home being offered rent free for a year has been criticized by the NSW premier but the property listing agent says demand has been through the roof.
- The rental listing was taken down by the agent who said he was overwhelmed with demand
- The CEO of the Tenants Union says the agent could potentially be in breach of the Rules of Conduct
- Sydney’s rental market is being squeezed due to low vacancy rates and a median weekly rent of $700
On Sunday the three-bedroom home in Greenacre in Sydney’s south west was advertised for zero rent for 12 months on the condition that the tenants complete a full renovation of the dilapidated home.
The ad described the offer as a good opportunity for someone with trade experience and said rent in the second and third year of the agreement would be negotiable.
The listing garnered instant condemnation by many online given the major rental crisis enveloping Sydney, which the Tenants Union says has reached “emergency” level.
The rental vacancy rate in Harbor City is about 1 per cent, according to the latest CoreLogic data, and this chronic undersupply of rental stock is translating into price hikes.
Compared to a year ago, the median rent for Sydney dwellings is now more than 12 per cent higher, putting the median weekly rent at $700.
PropTrack data released today shows on average a Sydney rental property is only listed for 18 days before its snapped up — this is four days faster than this time last year.
Rentals across large parts of Sydney from the Sutherland Shire, the northern beaches and the inner west are being snapped up the fastest in the state in 15 days.
‘It’s a fair deal’
The Greenacre listing was removed from the real estate site Domain by agent Rabie Chehade after about 24 hours because he said he was “inundated” with phone calls from interested parties.
“We couldn’t keep up, I was very surprised by the response, we were blindsided I guess. In a few hours we received close to 60 calls,” he said.
“The inquiries speak for themselves.”
Mr Chehade said about 12 people who are seriously interested, most of whom are tradies who can complete the estimated $60,000 renovation on the cheap.
The property has been sitting vacant for three years as the owner cannot afford to carry out renovations but does not want to sell the property as it has been in the family for 50 years, Mr Chehade said.
“Rent will be completely offset so if one year of free rent doesn’t cover the renovations, the free rent deal will continue into the second, third year or even longer. After that, rent will be below market rent,” he said.
“It’s a win-win for everyone. It’s a fair deal, especially for those looking for the security of a longer-term rental.”
Mr Chehade said this type of arrangement should be considered more widely as it would get more vacant properties into the extremely tight Sydney rental market.
Premier, tenants union unhappy with proposed deal
But Premier Chris Minns said the deal on offer was rejected.
“There is no excuse for this,” he said online.
“That’s why we are acting now to reform our rental reforms.”
The Minns government has promised to introduce a rental commissioner, put an end to evictions without reasonable grounds and review the role of the NSW Civil and Administrative Tribunal (NCAT) in rental disputes.
A spokesperson for Fair Trading NSW said the Residential Tenancies Act does not specifically address the issue of a landlord advertising free rent in exchange for renovation work, but all premises must be fit for habitation before being let.
Mr Chehade argues no laws are being breached as a tenancy agreement would not be signed until the property becomes habitable.
Instead, he said a hedge agreement would be drawn up between the tenant and landlord outlining the works needed, the cost of such renovations and how the rent would be offset.
But Tenants Union Association CEO Leo Patterson Ross said the agent had potentially breached the Rules of Conduct by not acting in accordance with the act.
“It is unlawful for a landlord to offer premises that are uninhabitable, and this is not a term that can be contracted out of, but it is up to the tenant to enforce the breach.”
It is common in Australia for people to hold onto properties when they do not have the means to maintain them but solutions are needed, Mr Patterson Ross said.
In the UK, home owners can sell management of a property to organizations that have the means to repair the property and put it on the market.
The Waterford City and County Council in Ireland has converted derelict homes into social housing using a repair and lease scheme, where the council part-funds the repair on condition that the owner leases to social tenants.