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Planned National Rental Affordability Scheme

Discussion in 'Real Estate' started by Nigel Ward, 14th May, 2008.

  1. Nigel Ward

    Nigel Ward Team InvestEd

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    Submissions close on 31 May 2008. The paper is available at: http://www.fahcsia.gov.au/internet/facsinternet.nsf/housing/nras.htm
     
  2. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    I'm a little sceptical about the process - there is no discussion in the paper about rent increases over time - and given that we are trying to find accomodation for people who can't afford to pay market rents, one might expect that any increase will be difficult for them to manage.

    Does this mean that rents will be "controlled" or fixed for the period of the benefit? What scope is there for the investors (who are likely to be institutional only :rolleyes: ) to increase rents to cover increasing costs?

    And will they be building unit blocks in places like Artarmon where the average rent on a 2BR apartment is $400+ per week? A 20% saving on rent is still going to be painful for anyone earning less than $55Kpa (30% of $55K is $320pw)

    ... still - I think it will be interesting to see how it shapes up.
     
  3. Billv

    Billv Getting there

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    National Rental Affordability Scheme - technical discussion paper

    8.2 Determining Market Rents
    Managers will be required to comply with a prescribed method for determining the market rate of rent.

    An independent valuation of the market rent will be required for each dwelling when it becomes available for rental under the Scheme. It will be adjusted annually by further independent valuations or, for no more than three consecutive years, in accordance with a relevant index designated for the purpose.

    Valuation of market rents must be based on the conditions in which dwellings will be rented. For example, dwellings that will be rented fully or partially furnished must be valued for market rate of rent when it is furnished. A written valuation from the valuer must be obtained and retained by the tenancy manager. Evidence of independent valuations and rental records must be available to FaHCSIA upon request. Market rents will not have to be re-valued when there is a change in a dwelling’s tenants, owners or managers.

    Valuations must be conducted by valuers who are registered in the relevant State or Territory and are subject to a Code of Conduct and professional practice standards of the Australian Property Institute. They must not own or have a commercial relationship with the registered owner or manager of the dwelling in question or a recipient of a Commonwealth or State benefit in relation to it.
    Cheers
     
  4. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Ahh - I saw the point on valuation, but missed the detail about annual adjustments.