ACT rental reforms bring a bit of balance back to renting

More reliable income stream? Isnt the market really hard for renters at the present?

At Dexar Group we strongly support initiatives that help to improve affordability, housing supply and living conditions for lessees. Each of these is a vital component of a healthy, balanced market. What we are calling for is genuine collaboration to address the barriers that exist to achieving these outcomes.

Where I have a serious concern is if any policy is implemented where the impact is to lessen supply, increase the cost of accommodation or play to minority prejudices at the expense great tenants or property owners who are the largest proportion of the rental market in Canberra.

Let’s look at a few examples:

• Affordability. The cost of property ownership is already rising as rates and land tax increase, particularly in the apartment market. Energy costs are putting increasing financial pressures on all residents and limited housing options for first home buyers has also increased pressure on the rental market.

• Housing Supply. Vacancy rates have been below 1% in Canberra for much of the last 2 years and yet we have unsupported assertions from Mr Dignam that increasing ownership costs for lessors will not make renting more expensive. Let’s be clear – any action that is taken that reduces the financial viability of investing in property must on basic economic theory have a negative impact on supply and will drive some investors from the market. We need more affordable housing, not less.

• Living Conditions. In a balanced market where affordable housing supply has been addressed, the competitive point of difference will of necessity become liveability – whether through energy efficiency, quality inclusions or weekly rent.

Several proposed changes are a step in the right direction and providing tenants with improved rights but there are too many grey areas. A few points to consider:

• Every person should be able to make their house a home – I’m sure many Landlord’s would be happy for tenants to make changes if they improve the property or if they’re willing to reverse these changes when they vacate. What concerns us is there are too many unanswered questions with what the government has proposed. What’s the definition for a modification? How much say can the Landlord have over what actually happens within their own properties? What happens should a tenant not return the property exactly as it was and how will these changes impact the current bond process or the value of the home?

• No industry professional or property owner supports “unfair eviction”. They are not rapacious tycoons out to “intimidate and punish renters” despite this petty assertion. No Landlord or Property Manager should ever evict a tenant based on retaliation or discriminative purposes. Landlords are currently required to give 26 weeks’ notice to a tenant on a ‘No Ground’s clause to provide tenants with reasonable notice and to allow Landlord’s freedom over how their property is used. Most investors want the security of a long term tenant and in many cases will be prepared to accept better conditions or lower rents to recognise the mutual benefits this brings. Without good reason, few owners would want to create 6 months’ worth of uncertainty for themselves or any unnecessary angst for the tenant.

• We welcome all discussions regarding energy efficiency rating in properties and believe a smarter approach to EER benefits both tenants and Landlord’s. What we don’t support is the suggestion that an owner can live in their own house and happily accept a lower energy rating than they are legally required to achieve in their rental property. Creating 2 classes of property makes no sense at all so once again let’s have a collaborative discussion where input from all stakeholders is considered. Let’s consider how we holistically improve energy efficiency across all housing stock rather than take arbitrary action to increase costs and reduce affordability.

Collaboration means working together for a great result. Despite resistance from some quarters, we want to repeat our offer to work with all stakeholders to identify win-win outcomes. The best possible experience for both landlords and tenants is in everybody’s interests.

As a property manager, this is going to open a can of worms. ACAT is already swamped with ridiculous claims and now you want owners to make applications to ACAT if they don’t want a dog tearing up their yard or modifications made to their million dollar investment they worked hard to purchase… The majority of owners are reasonable and happy to accept pets but those that don’t usually have good reasons why – one declined a cat today because shes highly allergic.
I can also assure you that no property manager is looking for an unhappy renter and the industry is highly regulated and reputable; its more work for us to have a run down property so we either make recommendations to the owner on upkeep and maintenance or price it accordingly. Or if its bad enough – we don’t take it.

Theres other issues with the ACT tenancy agreement and the relevant government bodies like the rental bond board and ACAT that need fixing before these.

As landlords managing our own property, we will be factoring these changes into our rental, just as we had to do when rates and land taxes were monumentally hiked. We do the rental as a business, not as as an act of benevolence or charity.

If I were still invested in residential property in the ACT, I’d just be adding $50 or $60 a week to the rent to cover the likely damage from pets and modifications. This is almost guaranteed to drive up the cost of landlords insurance, which will no doubt be passed on to tenants. No property owner is going to wear these extra costs. It is an investment, and there to make money.

I still find it ridiculous that the government has any say at all on the rules people put around use of their privately owned asset.

Yes good article. I also hope these changes will improve things for renters, but I’m still concerned previous ACT government interventions that were designed to reduce rental costs to Tennants didn’t deliver the outcomes promised.

The claim that increased Rates and Land Tax charges wouldn’t be passed on to renters, proved laughable.

Let’s hope on this occasion that following the changes, the reality matches the rhetoric.

Over complicating the rules for the market rarely makes things better for either Landlords or Renters.