Given the growing number of Australian tenants, several state governments have introduced a multitude of changes to their rental laws, with the intention of strengthening tenants' rights – but will these changes discourage investors real estate?
Although the extent of change in each state varied, the main objectives of the reforms were to limit rent increases and to give tenants the power to make minor changes.
New regulations have already entered into force in the Australian Capital Territory in November. As part of these changes, rent increases outside of fixed-term contracts are capped at one per year. ACT will also allow landlords to withhold consent from tenants who plan to make changes, provided they obtain approval from ACT's Civil and Administrative Court.
This year, the main changes to the rental laws of New South Wales and Victoria will take effect.
In New South Wales, homeowners must ensure that their properties are "structurally sound". In addition, they will not be allowed to prevent tenants from making minor renovations.
In Victoria, tenants will be allowed to make minor modifications to the property even without the consent of their owners. The state changes will also prevent owners from evicting without reason at the end of a fixed-term agreement.
Queensland is also planning to update its rental laws, which are currently under consultation. Under the proposed changes, Queensland landlords will also lose their power to evict tenants after a fixed-term contract.
Property manager Simon Pressley said the changes appear to be "onerous" and may even discourage investment and drive up prices.
For example, the possession of a pet is also one of the most discussed issues, with some changes preventing landlords from banning pets under rental agreements.
"The reality is that pets can cause damage to property. Legislation can say anything it wants about pets, but it is a fact. I think so it's utterly wrong for a state government, at any time, to say, "we're going to pass a law that takes away the right of the owner of the asset to say yes or no to pets, "he told the New Daily.
Pressley said strengthening engagement between landlords and tenants would be able to make the dynamics better than imposing "heavy" changes.
Nicole Madigan, director of media and communications for the Real Estate Institute of Queensland (REIQ), said the changes appear to infringe on property owners' rights to their properties.
"If enacted, the change in law would erode the fundamental rights of homeowners and discourage real estate investment throughout the state. The ripple effect of reforms would see tenants struggle to find suitable housing in already difficult conditions, "said Madigan, adding that the proposed changes were" reckless ".
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