Broome rental crisis: how landlords, tenants and rent-seekers all lose as shortage cripples town

Desperate home-seekers are joining huge waitlists and landlords are losing income as Broome’s rental crisis becomes so dire new warnings say the crisis will cripple the town’s ability to cater for an influx of tourists as a bumper dry season looms. Just 20 properties were advertised for rent at the time of print this week — only five of which were pet-friendly — and house-share pages on social media had become flooded with increasingly anxious pleas from locals and newcomers. While COVID-19 subsidy payments and travel restrictions had initially played a part in staff shortages, Real Estate Institute of WA Kimberley chair Tony Hutchinson said fewer vacancies meant homes were becoming less affordable for tenants, worsening the struggle to find workers heading into the dry season. And despite the rent rise, Mr Hutchinson said many landlords were unable to recoup a return on investment. “Because of COVID, people are moving back into WA — it’s seen as a safe place,” he said. “Couple that with the fact there hasn’t been many properties built here in the last few years because the market was in decline and returns just weren’t there for landlords. “High insurance rates, Shire rates and maintenance costs; it’s just not attractive for investors at the rent levels we’ve been achieving.” Mr Hutchinson said low interest rates were cause for optimism, but more needed to be done to solve the issue. “Tourism is booming with the COVID effect so there’s plenty of jobs in town, there just isn’t the residences to cater to workers,” he said. “We’ve seen backpacker hostels close down, like the Kimberley Club, and turn into non-accommodation facilities, which really doesn’t help. “If you want to solve the issue, it’s really about having a decent return on investment — whether that means raising rents or lowering outgoings like Shire rates and insurance costs — but I can’t see that happening.” The average rent across the 20 properties listed at the time of print was $510 a week, while those with pets would have to fork out a minimum of $450 to secure a dilapidated two-bedroom unit. Rooms in home shares listed on a popular social media page were starting at $220 a week. According to the REIWA September quarterly report, there had been a 62 per cent decline in availability when compared with the year prior. Broome time running out Francesca Codispoti has lived in Broome for almost 15 years, with small breaks in between, and said she had never seen the rental situation so bad. With two dogs, two cars and a boat in tow, Ms Codispoti and her partner’s needs are typical of a Kimberley family, yet options to accommodate that lifestyle are now almost non-existent. “I’ve been looking for a new rental for almost 12 months. I sort of knew my landlord was looking to do something else with the house, so I had been looking for a while,” Ms Codispoti said. “There’s been nothing suitable available. There’s units, but we have two dogs, two cars and a boat, so we need something decent size that will allow pets. “If you do find something that can accommodate all that, there’s 15-20 other applicants so your chances of being successful are slim.” Ms Codispoti said she had seen many rentals come back on the market more than $100 pricier than when they were previously advertised. “It’s really a case of if you are lucky to get offered something, then you have to take it, you don’t really get a choice in the price,” she said. “In recent weeks I’ve started to look at properties that are almost completely out of our budget, but it’s our only choice. “We haven’t been accepted anywhere yet, and if we don’t find somewhere by the time we leave our current place then we’ll have to leave town.” Rental bump won’t cover costs John Kennedy, pictured, owns two properties in Broome. One, he occupies. The other, he rents out. A self-funded retiree who has lived in town for more than 15 years, Mr Kennedy said he had been on both sides of market fluctuations. “Since I purchased my investment property in 2000 I’ve seen rent increase and decrease pretty dramatically,” he said. “At one point I was getting $575 a week for the townhouse, then 12 months later I had it on the market for $375. “It left me barely covering the costs associated with owning it.” Mr Kennedy said he considered himself fortunate to still make a slight profit on his property and said many he knew weren’t so lucky. “In the 20 years I’ve owned the property I’ve never had a bad tenant,” he said. “That’s important to the bottom line. “I know people in town who have had terrible tenants who absolutely destroy the property. “If that happens then you definitely won’t make money. “You’ll be putting anything you made into the cost of repair.” A pricey pill to swallow For fear of upsetting negotiations, our next case study did not want to be named, so will be referred to as Sue. Sue has lived in Broome for several years and is coming towards the end of her residential lease period. With no intention of moving, Sue said she was trying to negotiate to re-sign the lease at a similar price. “I’m hoping the owner will work with me and not increase rent too much, but who knows?” she said. “There’s so many people looking for rentals, so I’m sure they could easily raise rent to a point which I couldn’t afford. “I’d have to move out and they can just get another tenant in. “Obviously I’m not the one with the power in this situation. “I don’t want to move and don’t want the stress of competing for other properties, so I’ll probably have to swallow the bitter pill of an increase in rent.” Insurance costs hit rental income Esther Herren-Cummins lived in Broome for 12 years before moving interstate and renting the family home out. She said she understood the frustrations of renters, but people were misinformed about how much money landlords would make. “Broome has always been expensive, both to rent and to own,” she said. “You aren’t anywhere near a major city. You need to accept that with the distance comes increased costs for almost anything — in the last two years our insurance costs have increased from approximately $2000 to over $6000. “Not many homeowners can afford to absorb that increase, and that’s just the insurance, we also have the shire rates, which are over $3000, the water rates, also over $3000. “You have to pass it on to the tenants, otherwise you make no money and there’s no point to owning a property.”