Minimum standards for rental property condemned by industry body ACT

Following the release of the ACT’s draft bill which will put in place minimum standards for rental properties – as well as removing the power to evict without cause and criminalizing landlords or agents who seek rental offers, among other things – the Real Estate Institute of the ACT (REIACT) shared that no recommendations from the institute had been adopted in the bubble project, despite its participation in the first round of consultation.

In a press release written by REIACT chief executive Michelle Tynan, she said the institute had studied the effects of similar legislation introduced in both Victoria and New Zealand, which she said showed that “their concerns are well justified”.

The Victorian government mandated the introduction of minimum standards early last year. According to Ms Tynan, Victoria is now “starting to see the real effect” of the reforms in the private rental market.

She said: ‘While the Government of Victoria argues that rent reforms’ strike the right balance between helping tenants have safe, secure and affordable housing and benefiting rental providers with clear obligations and greater accountability for tenants”, property experts in Victoria are now seeing that rental providers are simply leaving the market due to complex reporting requirements and that it is now “too difficult” to maintain their investment properties. »

According to the CEO, “this has been further compounded by the crippling backlogs that VCAT is currently facing, with delays of up to 22 weeks for a hearing related to tenancy disputes”.

She said it’s a similar story in New Zealand, where minimum standards were introduced in 2017. Since then there has been a reduction in rental properties available in some jurisdictions of up to 50%, which , according to Ms Tynan, had seen owners sell. in place, “due to onerous compliance requirements and a sense that their rights as owners have slowly been eroded with the implementation of each new legislative mandate”.

According to the CEO, since the Attorney General’s announcement of his intention to move the bill forward, comments have abounded that ACT owners “need to move with the times now” and that if “owners don’t can’t afford to clean up their properties to a minimum standard then they shouldn’t be on the market.

From his point of view, “the ideology of this sentiment is admirable; however, the reality is very different”.

“The biggest losers, as you see now in other jurisdictions, are tenants,” Ms Tynan said.

As Western Australia also seeks to move forward with similar legislation, it relied on the recent state-led survey which raised alarms that more than six in 10 investors would leave the state’s rental market if major changes to residential tenancy laws are passed.

When the results were released, the Real Estate Institute of Western Australia (REIWA) warned that if the new laws come to fruition, it would “only push the area deeper into a rental crisis”.

For Ms Tynan, “if this survey is indicative of investors nationwide, for the ACT it would see over 26,000 investors leaving the market”.

Pointing out that the ACT is already facing a vacancy rate below 1%, she reported that “figures provided to the Real Estate Institute by the ACT Government showed that in October 2021 there was 49,233 properties subject to property tax in the LOI”.

“As of May 2022, there were only 43,873 lease bonds filed with ACT Revenue. This represents a decrease of 5,360 properties in the ACT private rental market over this six-month period,” she said.

The CEO quoted comments recently published by the Chief Minister in the Canberra timetables – which implied that “he was keen for the ACT to maintain a vacancy rate of around 3%”.

Ms Tynan shared: “The ACT already has the unenviable crown of the most expensive city to rent in Australia. Risking further upward pressure on rents and reduced rental stock availability will inevitably see only our most vulnerable Canberrans, but also many tenants already facing rental stress, forced into homelessness.

Noting that the REI lobbied the bill “for just and achievable results,” she said she warned the ACT government about many of these unintended consequences – “and the very people they are meant to protect.”

“Forcing this magnitude of change on legislation, based on just over 700 respondents to a survey, which has a base of over 43,000 investors and 55,000 tenants, is irresponsible and negligent of the Attorney General “, she argued.

In conclusion, the CEO acknowledged that there is no simple answer to the current national crisis in our rental market, but suggested that “for the ACT government to pursue these changes, it will simply push many tenants into homelessness”.

“For many people renting in the ACT they have no other choice, for renters they have a choice and that is to sell,” she said.

She concluded: “Perhaps the Attorney General has information that we don’t, about how the ACT is going to escape these ‘unintended consequences’ that no other jurisdiction has.”

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About the Author

Grace Ormsby

Grace is a reporter for real estate and investment brands Momentum. Grace joined Momentum Media in 2018, bringing with her a Bachelor of Laws and a Bachelor of Communications (Journalism) from Newcastle University. She is passionate about providing easy-to-digest information and relevant content for her key audiences and… Read more

Minimum standards for rental property condemned by industry body ACT




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Last update: August 09, 2022

Posted: August 10, 2022