Residential rents are currently rising and will continue to do so. Affordability is plummeting and government policy is actively making it worse. Affordable housing has become something of a hot topic for governments and there have been some laudable actions taken by both Federal and State governments over the last 12 months to address and remedy this. But simultaneously, in Victoria and especially in Queensland, decisions have been made that are counterproductive.
There are two decisions for Victoria that have had a significant impact already and will continue to make the situation worse. The qualification requirements for agents were increased sixfold, meaning fewer Property Managers and a jump in salaries as agencies compete for a shrinking pool. This will lead to higher charges to property owners. Most importantly, a raft of changes was made to rental rules just over a year ago. Some were worthwhile, in that they provided better protection to renters (aka tenants). Others significantly distorted the appeal of owning a rental property and added significant costs.
It could be argued that the changes were well intentioned. We see things a little more cynically and observe the politics of a Labour Government who is battling to hold some seats from Green candidates. Since a great part of this battle has been for renters, the Government can benefit by showing all of the positive changes being made to improve renters’ rights prior to the next election. But there is a sting in the tale.
Rental Providers (aka Landlords) are starting to sell. So, available stock is diminishing, immigration is just starting to gear up again, and the cost of ownership has jumped. Combine this with the extraordinary decision by the Queensland Government to include interstate property ownership in assessing the land tax for Qld properties, and the appeal of holding investment property further drops.
So, rents will not only increase, but the pace will likely increase also. When governments wring their hands over the coming years and blame “greedy landlords” for the rapid rise in rents, along with looking for solutions to the Affordable Housing crisis, just know that much of it is of their own creation. See this article predicting exactly this outcome a year ago, when rents were falling.