There has been plenty of rhetoric around the Victorian Government’s proposed minimum rental standards over the past couple of months, with REIV’s CEO Kelly Ryan the latest to chime in.
The controversial proposal – which is open for consultation – imposes potentially impactful changes on landlords during a period when the rental market is already under significant stress.
The proposed changes are mostly focused on improving energy efficiency – a move that many would agree is well warranted. But with demand for rental properties currently high and stock low, some are suggesting this could be the straw that breaks the rental market’s back.
In an opinon editorial published by the Herald Sun on the 27th July, REIV CEO Kelly Ryan echoed the voice of many property experts:
“The VictorianGovernment’s intent to improve the energy efficiency standards of rental properties is commendable. However, the reality of rolling out these standards too quickly will create significant financial pain for rental providers in a very short period.”
The piece echoes the views expressed by REIV President Jacob Caine in a statement made on July 2nd, saying the Victorian Government needs be cautious about implementing new standards without financial incentives, noting that such a move could trigger a further drop in supply. Landlords who cannot comply with the new standards within the specified timeframes would be forced to either withdraw their properties from the rental market or sell, leaving more renters high and dry.
If agreed upon, the changes would be regulated in October 2024, with compliance dates commencing from October 2025.
With vacancy rates currently sitting at around 1.2%, Victorian tenants don’t need more landlords selling up. Will this move by the government be an unmitigated disaster for the rental market? Watch and see.
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