'Outrageous' email from real estate agent to Australian landlords: 'price gouging'

‘Outrageous’ email from real estate agent to Australian landlords: ‘price gouging’

A high-profile real estate agency has defended its strategy of encouraging landlords to beat renters with higher rents, saying in some cases an extra $10,000 a year could be squeezed out of tenants.

A marketing email from Ray White’s West End Brisbane branch, obtained by 7 News, says property managers have recommended rent increases averaging 17 per cent for lease renewals in October and November.

An average rent increase of over 20 percent is recommended for lease extensions in December.

“This can add up to $10,000 in additional rental income per year,” the leaked email reads.

Brisbane is struggling with a record low vacancy rate of 0.7 percent. Source: Getty

“Interestingly, most tenants are okay with the rent increase because when they look at what’s available on the rental market, they understand that the rent is fair and reasonable.”

But Tenants Queensland’s CEO made the comment as “Line estate agents say they should feel a little better if they’re raising rents”.

“People have to agree to these outrageous, opportunistic rent increases for fear of becoming homeless,” Penny Carr told Yahoo News Australia.

“What we see a lot is that if you don’t take them, these rent increases come with termination. There is no negotiation or power for the tenant in it. You will be put over a barrel.”

Greens bang strategy and demand rent freeze

Green Party spokesman for housing and homelessness Max Chandler-Mathew says the call for rent increases is “blatant price gouging”.

“The outrageous greed that Ray White encourages is a perfect example of why we need to freeze rent increases nationwide for two years,” he told Yahoo News Australia.

“When we see families sleeping in cars and tents because of an acute lack of affordable housing, it’s disgusting when real estate agents see this as an opportunity to make money.”

Ray White Real Estate Agent's Letter to Landlords.

Real estate agent Ray White’s letter to landlords encouraged them to raise rents. Source: Seven News

The state government demands “compassion” from landlords.

But the state opposition says renters shouldn’t blame landlords or estate agents for rising prices as Brisbane struggles with a record-low vacancy rate of 0.7 per cent.

“You should blame the Queensland state government,” Tim Mander told Yahoo News Australia.

“The only reason something like this would happen is because there aren’t enough houses. This is the result of poor policy by the Queensland Labor government.”

Asked what she is doing to address the state’s crisis, the Minister for Communities and Housing told Yahoo News Australia that she is consulting with a host of leading industry associations, non-governmental providers and private sector stakeholders at this week’s Housing Summit.

Leeanne Enoch said it was “appalling to see a handful of real estate agencies issue significant rent increases amid unprecedented pressure on the entire housing system”.

“I urge real estate agents and owners to show their sympathy,” she said.

The Ray White West End store in Brisbane.

Ray White says it has been caught in the crossfire because of the state government’s inadequate housing policy. Source: Google Maps

Ray White says Queensland government is to blame

Amid the argument, Ray White stands behind his email and says it is “a real estate agent’s role to communicate market conditions so clients can make a fully informed decision.”

“It’s our responsibility,” CEO Jason Andrew told Yahoo News Australia.

“We accept that this is an emotional issue and we do not pretend not to be, and we are not ambivalent about the needs of our tenants.

“We feel that our company has been caught in the crossfire of the state government’s inadequate housing policy.

“The fact is, there aren’t enough houses for people to rent. That is the actual problem.”

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