The new rental laws in the Australian Capital Territory could have unintended consequences for the local housing market, with investors appearing to be starting to lose interest, according to a market observer.
The revised Canberra Residential Rental Act came into force in November. As part of these changes, rent increases outside of fixed-term contracts are capped at one per year. The new rules also make it easier for tenants to keep pets and make minor changes to rental properties.
One of the unintended consequences of the changes is the rapid increase in rents in Canberra, said Hannah Gill, general manager of Independent Property Management. She said the rent restrictions applied in November "increased rents faster".
"We saw an increase of almost $ 18 year-over-year for average rents in our portfolio. The December 2018 average was $ 448 and last month was $ 466. This is an increase quite significant from year to year. the unintended consequences we were worried about, "she said in a report published in RiotACT.
This could suggest that the owners increase the rents to the maximum allowed.
Recent figures from SQM Research show that Canberra's rents for houses and units are the second highest of all the capitals near Sydney. This could be attributed to the low rental housing stock due to the low activity of investors in the market.
"Four years ago, we saw half of the development recouped by investors and now, from what I see, is 10 to 15%," said Gill.
Vacancy rates in Canberra remained tight at 1.7% in December. Although this is an improvement from the 1.1% vacancy rate recorded the previous month, this could be due to the seasonal movement of students and some specific workers in the job market. 39; industry, according to SQM Research.
Other housing markets face similar problems with changes to rental laws, including NSW and Queensland.
Property manager Simon Pressley said the changes appear to be "onerous" and may even discourage investment and drive up prices.
For example, 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's a fact. Let's pass a law that removes the right of the asset owner to say yes or no to pets, "Pressley said in one analysis.
Pressley said that strengthening engagement between owners and tenants would be able to make the momentum better than imposing "heavy" changes.
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