Landlords will withdraw homes from rental market in response to new laws: REIV

Landlords will withdraw their properties from the rental market if the Andrews government’s proposed rental reforms become law, Victoria’s peak real estate industry body has claimed.

The Real Estate Institute of Victoria, whose 5000 members are predominantly real estate agents and landlords, labelled the proposed changes “draconian” and argued they would cripple the state’s rental housing market.

The government has promised to introduce the long-awaited legislation, first announced last October, into Parliament this week. While the legislation has not yet been made public, the government has already spruiked many of its 130 proposed reforms.

Under the changes, landlords would only be able to prohibit renters from having a pet if they secured an order from the Victorian Civil and Administrative Tribunal, rental bidding would be banned and rent increases would be limited to once a year.

Bonds would be capped at four weeks’ rent and tenants would be given the right to make minor modifications to a property without consent from the landlord. Every rental property would also need to meet basic safety standards and have a functioning stove, heating and deadlocks.

REIV president Richard Simpson said in its current form, the legislation would push up rents and result in landlords becoming more selective about choosing a tenant.

“Numerous members have already told us they will remove their investment properties from the private rental market if these reforms are passed,” Mr Simpson said.

Mr Simpson said a shrinking rental pool would put further pressure on a tight rental market, with Victoria’s vacancy rate already at a decade-long low of 1.8 per cent.

But Wendy Stone, associate professor in housing and public policy at Swinburne University, said there was very little evidence to suggest that investors would leave the private rental market on the basis of the reforms.

“The current tax breaks for investors are so generous,” she said. Professor Stone said the reforms were a first in Australia and repositioned investors as housing providers with responsibilities.

Tenants Victoria chief executive Mark O’Brien said talk of a mass landlord exodus was “baseless scaremongering”.

“If a landlord wants to exit the rental market and sell their property, one of two things will happen,” Mr O’Brien said. “Either a home buyer will be able to purchase the property, or another investor, who realises these reforms are fair, common-sense changes will snap it up and put it back on the rental market.”

He added that if a property was left empty, the owner could be hit with the government’s new vacancy tax.

Speaking on radio station 3AW on Monday, landlord “Michael” said he was considering offloading his six rental properties.

“I’m at a point where I think we’re just going to sell up and enjoy,” he said, citing rising costs and the proposed reforms. “The tenant has all the rights.”

The legislation is expected to breeze through the lower house, where the government has a majority, but could stall in the Legislative Council,  where micro-parties and the Greens control the balance of power.

A powerful lobby group in the Victorian political landscape, the REIV is lobbying members of the upper house to oppose the reforms.

With less than four sitting weeks remaining for the year, supporters of the reforms have questioned the likelihood that any legislation will be passed before the state election on November 24.

The REIV has strongly opposed the government’s plan to abolish the 120-day “no reason” notice to vacate.

Mr Simpson suggested landlords would be more likely to evict tenants for poor behaviour, rather than give them a warning, or second chance. “Tenants will need to be on their best behaviour,” he said on 3AW.

The Individual Housing Providers Association, another lobby group for property investors, has warned the reforms could drive landlords away from the private rental sector and towards short-term letting options.

“A landlord might simply say at this point, it’s actually easier to rent on Airbnb where you have more control over the social profile of your guests,” co-founder John Mills said. “It allows people to exercise more discretion.”

Resource from Domain (Click for original ariticle)

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