New COVID support rolled out in NSW, Victoria

Additional support measures for landlords and tenants impacted by the most recent lockdowns in New South Wales and Victoria have been unveiled, jointly funded by state and federal governments.

In NSW, protection mechanisms for tenants impacted by lockdown have been strengthened, following the reinstatement of a moratorium on evictions until early September.

Property owners who provide reduced rent for tenants who have lost 25 per cent or more of their income have the option of applying for a grant of up to $1,500 or a reduction in land tax.

Commercial tenants will also be protected from eviction, with landlords unable to lock out or evict impacted businesses without first going to mediation.

Landlords with tenants in financial distress can also claim a land tax concession if they provide rent reductions.

In Victoria, a key feature of the state’s new business support package unveiled this week includes a scheme to support commercial tenants and landlords.

The package will provide a total of $80 million for affected landlords who provided rent relief to tenants impacted by the lockdown.

The new schemes come as Victoria’s lockdown is lifted and Sydney’s is extended, as authorities deal with the Delta variant outbreak.

Real Estate Institute of NSW chief executive Tim McKibbin said the move to virtual tours and COVID-safe one-on-one inspections was achieving results, with the conversion to transactions remaining high.

Mr McKibbin said qualified buyers remained motivated and some sellers were even bringing plans forward to tap into the continuing demand.

“The vast majority of agents are doing an admirable job in tough circumstances. So much so that real estate remains one of few industries performing with strength,” Mr McKibbin said.

“These challenging times elevate the importance for every industry, and every worker, to play their role as well as they can.

“The sense of community unease is understandable with no firm end date to lockdown in sight, and the economy remains delicately poised."

But Sydney property investors, particularly those on the Lower North Shore, shouldn’t panic over the prospects of an extended lockdown, according to Ray White Lower North Shore's Michelle Lucas.

Ms Lucas said many investors had shelved plans to lease properties following the reinstatement of the evictions moratorium.

She said the total number of vacancies in Sydney’s rental market had gradually declined over recent months, putting investors in a strong position, but the recent moratorium announcement had stirred up uncertainty over rental supply.

“While last year’s lockdowns invoked unknown territories for the rental market, the sentiment this time around has changed,” Ms Lucas said. 

“Tenants have adapted to a new way of working and living, and rather than moving out of fear, prospective renters are moving to the Lower North Shore out of desire.”

Ms Lucas said demand from upgraders, downsizers and returning expats was continuing to drive Sydney’s rental market, urging property owners to continue with their leasing plans.

In the first two weeks of this financial year, Ms Lucas said her Lower North Shore agency had received 582 enquiries, 80 per cent of the total enquiries made in June.

“While remote and flexible working remain a semi-permanent reality in this pandemic, Lower North Shore investors risk missing out on property leases and precious yield if they remain idle,” Ms Lucas said.

“We have seen investors jump back into the luxury market this year thanks to strong capital growth opportunities, low interest rates and vibrant rental market promises. 

“However, the current COVID-19 lockdown and news of the rental moratorium has perplexed investors, with many hitting the brakes on listing their rental properties.

“Contrary to inner city and eastern suburbs rental markets which rely heavily on international students, vacancy rates in the Lower North Shore are dwindling fast. Active investors are reaping the benefits of enthusiastic renters, while idle investors are missing out.