Aussies outrage over finance guru’s rent hike
The Reserve Bank has raised interest rates significantly with landlords increasing mortgages to tenants
Australian tenants A TikTok finance guru insists the rent hike was not the fault of the landlords and that tenants could simply ‘move elsewhere’.
Samuel Nasher in his SJN Finance TikTok recently said that ‘many people worry that rents are rising and say it’s only so the rich can benefit’.
He then showed some statistics to explain that between May 2022 and June 2023, on an average $600,000 loan, mortgage payments increased by more than $1,000 a month.
Mr Nasher explains on TikTok how landlords are paying huge mortgage bills
The Reserve Bank has raised the official cash rate 12 times since May last year, deciding to raise rates at every meeting except April.
‘They [landlords] Not necessarily rich but they are in a position where the debt repayments have increased drastically,’ Mr Nasher said.
‘So they have no choice but to raise the rent; It’s not the property investor’s fault.’
However, the post was met with a flood of comments arguing that tenants don’t have to cover the owner’s high mortgages.
Why is the responsibility of the rent? Landlords get tax benefits for this,’ said one person.
‘It’s entirely the investors’ fault if market rents don’t pay their interest,’ said another.
‘Investors take that risk when stressing tax-free gains.’
One woman said: ‘If you can’t afford an investment property, you should probably sell it.’
This prompted Mr Nasher to reply: ‘If you can’t afford the rent, you should probably move somewhere cheaper.’
Mr Nasher said in a follow-up post that the market determines rental prices and that landlords are getting ‘hammered’ by rising interest rates.
The Reserve Bank has raised the official cash rate 12 times since May last year, deciding to raise rates at every meeting except April.
It now sits at 4.1 percent.
The video was met with mixed reactions, with some slamming the finance guru as saying it’s not the tenant’s responsibility to pay their landlord’s mortgage.
A return to hiking after a break in April surprised many, with the RBA deciding to lift interest rates again in May and June.
The next meeting of the board will be on July 4.
A speech by RBA Deputy Governor Michelle Bullock and a panel appearance by Assistant Governor Christopher Kent – both on Tuesday – should provide insight into these decisions and where the board may be headed.
The minutes of the June board meeting will also be released on Tuesday.
The RBA has raised concerns about persistent sources of inflation, and May’s strong labor force report will do little to allay those concerns.
But, on the other hand, business and consumer sentiment surveys weakened and the economy grew a mere 0.2 percent in the March quarter, suggesting interest rate hikes are beginning to take effect.
Another item worthy of a diary entry includes a new Employee Earnings Index from the Australian Bureau of Statistics.
The index will be derived from single-touch payroll data for the first release on Wednesday.
Also on Wednesday, Westpac will release its leading index. The index consists of a collection of data points that indicate the likely path of economic activity.
Also out this week is the Purchasing Managers’ Index, which charts economic trends in manufacturing and services.
What the latest rate hike means for you
$500,000: up $81 a month from $3,027 to $3,108; Annual repayments increase to $14,232 from May 2022
$600,000: up $97 a month from $3,633 to $3,730; Annual repayments increase to $17,088 from May 2022
$700,000: up $114 per month from $4,238 to $4,352; Annual repayments increase to $19,932 from May 2022
$800,000: up $130 a month from $4,843 to $4,973; Annual repayments increase to $22,776 from May 2022
$900,000: up $146 per month from $5,595 to $5,449; Annual repayments increase to $25,936 from May 2022
$1,000,000: up $162 per month from $6,216 to $6,054; Annual repayments increase to $28,476 from May 2022
Monthly repayments based on a Commonwealth Bank variable rate rise to 6.34 per cent, up from 6.09 per cent, reflecting a rise in the Reserve Bank’s cash rate from 3.85 per cent to 4.1 per cent. Annual repayments on 30-year loans in early May 2022 compared with June when the RBA cash rate was 0.1 per cent and the variable rate was 2.29 per cent.
Share or comment on this article:
Read Full News Here