Feature

Rent Freeze, Land Scarcity Affect Demand

Housing is very important. Shelter is a basic need that has become a socio-economic right the world over. While there are some homeless people in the country who sleep on the streets and parks, the majority have a roof over their heads. The situation is the same in other countries too. But in Fiji, especially in the Suva area, university students have reported having to pay high rent for a room which they share with other students. In some cases, three or four students are crammed in one room of the three or four bedrooms houses with each student paying $200 or $300 to the landlord. Today, we share the views of the Real Estate Agents Licensing Board on the students rent issue and other housing/property related matters.
17 Jul 2019 20:44
Rent Freeze, Land Scarcity Affect Demand
Real Estate Agents Licensing Board chairman Abdul Hassan.

The Real Estate Agents Licensing Board (REALB) has no power to control the rental of flats or rooms by individual landlords to students and others seeking accommodation.

It only deals with agencies that are involved in the real estate business, which includes buying, selling and renting of properties.

But it believes that some landlords are taking advantage of the situation by charging students exorbitant rent for space in a room with others.

“I think most of the students directly get approval from the landlords to rent and because of the scarcity of property, the rental remains high,” said REALB chairman Abdul Hassan.

“I very much doubt that the students have secured the flats or rooms through real estate agents.

“Some landlords are taking advantage of the situation and I think the stakeholders need to have a holistic look at this issue.

“Some students even pay the rent to secure their rooms or flats when they are on semester break.”

 

Rent freeze

Mr Hassan said rental was a very big issue and a lot of issues were involved in it.

“The Government is trying to control rental with the rent freeze, which may provide relief to a certain group of people,” he said.

“But if you look at other things, any rent freeze for long may have adverse effects and some don’t agree with it for various reasons.

“The first is that home owners must get fair return on their investment. What’s going to happen if there’s no returns is that people won’t build and there will be scarcity of property and the quality of houses will go down.”

Mr Hassan said some people would not want to move out of a flat and would try to stay there because they know that there is a rent freeze.

“If you look at the market for properties, then it’s very high so owners should get at least a fair return on their investment,” he said.

 

A possible solution

According to REALB, some countries have a voucher system to supplement the rent payments for some people.

“In Fiji, one thing which can be done is to accommodate low income earners in PRB flats in transit until their income goes up,” said Mr Hassan.

“The low-income earners can stay for two, three or five years maximum and move out once their income rises and there should be a monitoring system.

“In the 1970s, there used to be a Fair Rents Act where a formula was applied if there was a dispute between the landlord and the tenant on the rent.

“The flats used to be examined and if the tenant or the landlord was unhappy with the rent decided on, then the matter used to go to the Appeals Tribunal.

“I don’t think this Act has been revoked.”

The issues connected to housing.

Mr Hassan says there are other issues connected with housing.

“These includes the level of income, security of employment, banks advancing loans to buy houses, what relief is given to the borrower,” he said.

“Property owners want enough rent and I think in the long run the rent control or freeze won’t help as the condition of house deteriorates because repairs are not done and other things.”

The demand for land

Mr Hassan said the Suva-Nausori and Lautoka-Nadi corridors were the fastest developing areas in the country.

But, he said, the demand for land in Nadi was quite high and so was the price as demand and supply go together.

“I have been told that the number of properties that will be constructed in Nadi now will be towards the Sigatoka side outside town and the Votualevu side,” he said.

“The Namaka and Martintar areas are full and developments are also happening along the Nadi Back Road, which is prone to flooding.”

Mr Hassan said scarcity of land for property development has always been there, adding that hardly any subdivisions are taking shape between Suva and Nausori now.

He said the price of properties had not gone down, adding that the market has been a bit stagnant.

The restriction on foreigners.

“Foreigners can’t invest in residential properties in urban areas now because laws have been in place for the past two years to stop this,” he said.

“They can only buy properties outside the urban centres, in the rural areas.

“So far we haven’t seen any breach since the law came into effect because we get the sales evidence which we see.”

Edited by Epineri Vula

Feedback: avinesh.gopal@fijisun.com.fj

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