Aussies furious after finance guru defends rent increases, says tenants should move elsewhere if they can’t afford costs
- The Reserve Bank has raised interest rates sharply
- Landlords pass on mortgage increases to tenants
Australian tenants have hit back after a TikTok finance guru insisted rent increases were not the fault of landlords and tenants could simply ‘move elsewhere’.
Samuel Nashaar recently said on his SJN Finance TikTok that “many people are concerned about rents going up and say it’s only so the rich can benefit.”
He then showed some numbers explaining that between May 2022 and June 2023, with an average loan of $600,000, mortgage payments increased by more than $1,000 per month.
Mr Nashaar explained on TikTok how landlords paid hugely increased mortgage bills
The Reserve Bank has raised its official cash rate 12 times since May last year and elected to raise rates at every meeting except April
‘She [landlords] are not necessarily wealthy, but they are in a position where repayments have increased dramatically,” Mr Nashaar said.
So they have no choice but to raise the rent; it’s not the real estate investor’s fault.’
However, the post received a deluge of comments claiming that tenants shouldn’t be covering owner’s higher mortgages.
Why is it the renter’s responsibility? Landlords get tax benefits for this,’ says one person.
“It’s entirely the investor’s fault if the ‘market rent’ doesn’t cover their interest payment,” said another.
‘The investor takes that risk by gambling on tax-free profits.’
One woman said, “If you can’t afford an investment property, you should probably sell it.”
This prompted Mr. Nashaar to reply, “If you can’t afford rent, you should probably find somewhere cheaper to live.”
Mr Nashaar said in a follow-up post that the market sets rents and that landlords were ‘hammered’ by rising interest rates.
The Reserve Bank has raised its official spot rate 12 times since May last year and has elected to raise rates at every meeting except April.
It is now at 4.1 percent.
The video received a mix of reactions, with some slamming the finance guru, saying it was not the responsibility of tenants to pay off their landlord’s mortgage.
The return to increases after the April break surprised many, with the RBA opting to raise interest rates again in May and June.
The board will meet on July 4.
A speech from RBA Deputy Governor Michele Bullock and a panel appearance from Assistant Governor Christopher Kent — both on Tuesday — should offer insight into these decisions and where the board might go next.
The minutes of the June board meeting will also be released on Tuesday.
The RBA has raised concerns about continued sources of inflation, and the strong labor force report for May will do little to allay those concerns.
But on the other hand, business and consumer confidence surveys are weak and the economy grew a meager 0.2 percent in the March quarter, suggesting that rate hikes are starting to take effect.
Another item worthy of a journal is a new worker income indicator from the Australian Bureau of Statistics.
The indicator, which will be released for the first time on Wednesday, will come from single-touch payroll data.
Also on Wednesday, Westpac publishes its leading index. The indicator contains a collection of data points that indicate the likely path for economic activity.
The provisional purchasing managers index will also be released this week, which charts economic trends in production and services.
What the latest rate increase means for you
$500,000: $81 per month up to $3,108 from $3,027; annual repayments up to $14,232 since May 2022
$600,000: $97 per month up to $3,730 from $3,633; annual repayments up to $17,088 since May 2022
$700,000: $114 per month up to $4,352 from $4,238; annual repayments up to $19,932 since May 2022
$800,000: $130 per month up to $4,973 from $4,843; annual repayments up to $22,776 since May 2022
$900,000: $146 per month up to $5,595 from $5,449; annual repayments up to $25,936 since May 2022
$1,000,000: $162 per month up to $6,216 from $6,054; annual repayments up to $28,476 since May 2022
Monthly repayment increases based on Commonwealth Bank floating rate rising to 6.34 percent, up 6.09 percent to reflect Reserve Bank cash interest rising to 4.1 percent, up 3 .85 percent. Annual installments for a 30-year loan compared to the increase in June with early May 2022, when the RBA spot rate was 0.1 percent and the floating rate was 2.29 percent