Victoria’s rental property reforms are backfiring
It’s taken just over a month for the Victorian State Government’s rental property tenancy reforms to make an impact, with early indications showing Daniel Andrews’ plan may be backfiring.
One month after Premier Daniel Andrews announced plans to give renters more power – including the right to have pets and make modifications on homes – some landlords have taken their properties off the market amid growing concern that the proposed changes go too far.
The reforms are centred around four key points:
- Agents will be required to advertise properties using a single price rather than a range.
- Landlords will be restricted to increasing rent once every year instead of every six months.
- Landlords will not be able to charge a bond worth more than one month’s rent for any property where the rent is less than double the weekly median (that is, less than $760).
- The 120-day “no specified reason” notice to vacate will be scrapped and shonky landlords and agents could be named and shamed on a public blacklist.
Effectively the Government is attempting to shift the power balance towards tenants, by making it harder for landlords to increase rent, evict tenants, refuse pets and refuse tenants who wish to make alterations to the property. However according to the Real Estate Institute of Victoria, landlords are beginning to take their properties off the market due to concerns over the changes.
Given the relatively short timeframe since the reforms were announced, there is a lack of clear industry wide data available. But according to the REIV vice president Leah Calnan, the impacts are already being felt.
“After the reforms were announced I actually had three of my long-term clients say ‘I don’t want to do this, I don’t want to have an investment property any more with these reforms’,” she said.
“These were all single investment clients – just average mums and dads who have one property and are doing the right thing. So if that’s my agency and I’ve already lost three, before the laws have even gone through, surely there’s a ripple effect for all the other agencies.”
REIV chief executive Gil King said there were deeper forces at play behind the announcements.
“It is no coincidence that this was announced by the Premier in Northcote where there is a by-election looming,” he said.
“These laws are about gaining support in one seat and nothing about what it will do across the whole state. They also have an election to win or lose next year … A lot of landlords will be disadvantaged by this.”