Renters still fear economic cliff despite JobKeeper, Jobseeker and mortgage relief extensions

The looming economic “cliff” is still striking fear into the heart of renters despite moves from the federal government and lenders to extend support to Australians left unemployed by the coronavirus crisis.

No moves have been made to extend the pandemic-era moratorium on rental evictions beyond October in any state or territory, in contrast to major banks’ plans to allow some home owners an extra four months to start repaying deferred mortgages.

While income support through JobKeeper and JobSeeker will be extended, it will be at a lower level and tenants, their advocates and experts say this will plunge more households into rental stress.

Experts are calling for an extension to the moratorium but warn even that may not be enough to help vulnerable tenants.

Better Renting director Joel Dignam said despite the measures in place to protect renters, including rent reduction negotiation frameworks and the eviction freeze, renters were already falling through the cracks.

“There’s an ANU survey from May that found that of renters, about one in four were unable to pay their rent on time,” he said. “Some of them may have been able to make that up but there’s a large amount of people who have a debt building up.”

With an expectation for renters to pay back a shortfall in their rent, landlords might choose to evict their struggling tenants when the eviction ban was up, he said.

Melbourne renter Harrison Canton’s shared household has tried and failed twice to get a rent decrease since the pandemic began.

Of the four tenants, two had been forced onto JobSeeker, which will be cut to $815 a fortnight in September, and another was planning on leaving in a month.

“It’ll just come down to cheaper food shops and … we’ll have to come up with an extra $600 to $700 a month together,” Mr Canton said. “I think it’ll entice some people to look into their super but it depends on how dire it is when it comes down to the crunch.”

University of Sydney urban planner and policy analyst Professor Nicole Gurran applauded the Tasmanian and ACT governments, which already moved to extend their relatively shorter freezes on evictions to September and October respectively, and called on other states to follow suit.

“We need an extension to the moratorium but the moratorium itself is providing very light protection to tenants in the private rental sector,” she said.

Tenants’ Union of New South Wales senior policy officer Leo Patterson Ross said while governments should extend the moratorium on evictions beyond September, the problem wasn’t evictions but affordability and negotiation processes.

“There’s a lot of talk now of rent prices falling and the people who have moved aren’t moving to a better deal, they’re moving back in with mum and dad or with friends,” Mr Patterson Ross said.

“For places like Sydney, we’re seeing people who have left the expensive areas because they can’t afford them any more, even after negotiating.”

Professor Gurran added that the problem with the moratorium was that the onus on negotiating on rent reductions was on the tenants.

“They are in a vulnerable position, need a rent reduction or release, so they don’t have many options available to them if they are unsuccessful in that negotiation.”

In Victoria, the Renters and Housing Union organiser Eirene Tsolidis Noyce said she was providing support to renters who still feared the ban lifting despite ongoing support.

“Renters are now facing deferred debt and that will come all at once at the end of the eviction moratorium,” she said. “We’re being bled dry and facing homelessness when we’re being told to stay at home.

“Kicking the can down the road until September has been irresponsibly hopeful.”

And while banks have indicated the mortgage relief will be extended, they had hedged by warning they might pressure over-leveraged borrowers, which Charter Keck Cramer residential director Angie Zigomanis said could mean time would be up for landlords with struggling tenants.

“It does get to a point where push will come to shove. You can’t keep giving them a moratorium indefinitely,” he said. “The landlord or owner may be quietly pressured to sell their properties.”

The Queensland, Victorian and NSW governments were asked by Domain if they would also extend their moratoriums.

Only Queensland responded, saying the state would continue to watch the situation and reassess.