New REIV data shows increasing demand for rental properties across the state has seen the vacancy rate in regional Victoria drop below two per cent.
The state’s lowest vacancy rates of just one per cent were recorded in Bendigo and Loddon, followed by Wodonga and Ovens-Murray at 1.4 per cent.
Low vacancy rates were also recorded in the Geelong and Barwon region as well as Ballarat and Central Highlands, at 1.5 and 1.6 per cent respectively.
While a healthy vacancy rate is typically around three per cent, high population growth combined with legislative changes for investors are impacting on supply.
Significant reform of the Residential Tenancies Act (RTA) was announced late last year with 14 reforms highlighted – all of which increased the rights of tenants at the expense of property owners. While these changes are only proposed at this stage, draft legislation is expected in the coming months.
The proposed changes would see property investors lose the ability to end a tenancy in both fixed-term and month-to-month agreements. Landlords will also be unable to withhold consent regarding pets and minor property modifications while bonds will be capped at the equivalent of four weeks’ rent for all homes below $760 per week.
While the REIV acknowledges that reform of the 20 year old legislation is needed, changes that overwhelmingly favour one party will not improve relationships between stakeholders. It will also not increase the supply of rental properties. In fact, it is likely to reduce supply which will increase competition, ultimately resulting in greater screening of tenants and higher rents.
It’s important for the government to remember that property owners have a significant financial asset at stake with regional Victoria’s median house price hitting a record high $396,500 in December. These investors also contribute to the state’s coffers by way of land tax. Balanced legislation is essential in order for a sustainable private rental market.
The REIV has established a petition calling on the Government to amend these changes with more than 11,000 signatures to date.
Property owners can sign the ‘Rentfair is Unfair’ petition at bit.ly/rentfair.