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How to keep your rental costs low in 2021

How to keep your rental costs low in 2021

Struggling to juggle the cost of rental prices with the added financial stress of COVID-related restrictions and lockdowns? There are options available to you to potentially lower your rental costs in 2021.

The latest Rental Report from Domain shows that in every capital city besides Melbourne, Perth and Hobart, rental values for houses over the September quarter increased by between 2.2% - 5.5%.

House rents increased over the quarter in Sydney for the first time in a year, climbing to a record high of $580 a week – an increase of $30 over the September quarter. According to Domain, the September quarter saw the strongest quarterly gain since 2008 for houses, and 2017 for units.

It was a similar story for units as well, with every capital city besides Adelaide, Perth and Hobart seeing increased rental prices by between 1.4% - 4.4% over the September quarter.

In Brisbane, Domain reported that unit rents have grown faster than houses over the quarter. This is a change from almost a year of stronger house rent gains.

RateCity tips to lower your rental costs

If your rent expenses are on the rise, there may be actions you can take today to help get your budget back on track and reduce financial stress.

Firstly, if you’re a NSW resident financially impacted by COVID, you can continue to negotiate a payment plan until November 11, thanks to the NSW Government’s moratorium on evictions.

The key is to have regular, open conversations with your agent and owner to make sure they understand the financial difficulties you’re under. Landlords in NSW can potentially apply for financial support for reduced rent they offer their COVID-affected tenants.

For Victorian residents, the moratorium on evictions was unfortunately not reinstated. However, new rental laws were put into place stating that the Victorian Civil and Administrative Tribunal (VCAT) must decide if it is “reasonable and proportionate” in current circumstances to allow a renter to be evicted.

If you’re not COVID-affected, instead you may want to consider doing your research and making sure you’re paying a comparable price to similar properties in your area. Rental prices often come down to supply and demand, so if you can prove there are plenty of affordable options nearby, then you might be able to ward off a rent rise.

RateCity research director, Sally Tindall, said: “The key to any rent negotiations is to have a conversation with your agent or owner early. Sticking your head in the sand and dodging calls from your landlord won’t make the rent issues go away.”

“If you’re a good tenant, then it's in your landlord’s interest to keep you. Switching tenants is an arduous, costly process for landlords, as vacant properties equal loss of rent.”

“If you’re a clean and reliable tenant then it could be in your landlord’s interest to keep you, rather than go through the expense and the rigmarole of finding someone new, who might not be as tidy and diligent,” she said.

You may also want to consider taking on a longer lease in return for a slight rent reduction. It’s a win-win for the landlord who won’t have to find new tenants on a regular basis, and you’ll have fixed rental costs for a longer period.

What if you can’t negotiate your rent rise?

If you aren’t successful at warding off a rent rise, then it might be worth thinking outside the box.

Can you take a flatmate on to keep your rent down? Or do you have a car space you can rent out to make some extra money? These ideas are likely to require approval from your landlord, but if it means keeping you as a tenant and it’s a fair request, they might say yes.

If you can’t negotiate your way out of a rate rise, consider moving to a more affordable area, where there’s more stock to help keep rents realistic. While moving can be an expensive exercise, it’s a one-off cost which can often be better than overstretching yourself week after week from shelling out more rent than you can afford.

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This article was reviewed by Personal Finance Editor Mark Bristow before it was published as part of RateCity's Fact Check process.

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