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Greens’ rental policy threatens rental market: REIQ

The REIQ has labelled the Greensโ€™ โ€œRenterโ€™s Rightsโ€ policy as unworkable and, if implemented, would pose a threat to the health of the rental market.

According to a statement last week, the REIQ have criticised the rental policy platform byย The Greens, saying it would see landlordsโ€™ rights decimated in favour of tenantsโ€™ rights with no thought to the future health of the stateโ€™s rental market.

One-third of Queenslanders rent and the overwhelming majority of those rent from private landlords, therefore, the continued participation of property investors is crucial to the stateโ€™s rental market sustainability, the REIQ has warned.

REIQ CEO Antonia Mercorella said removing landlord rights would not benefit tenants, butย instead, weaken the market and driving away a section of investors.

โ€œItโ€™s simply unrealistic to expect that landlords will continue to invest in real estate if they are faced with untenable arrangements that donโ€™t allow them to protect the value of their asset and strip them of fundamental rights,โ€ she said. โ€œInvestors have a range of options open to them, including shares and other asset classes. If their rights to manage their property are removed theyโ€™ll simply choose to invest elsewhere,โ€ she said.

โ€œEssentially, both tenants and landlords want the same thing – a โ€˜set and forgetโ€™ arrangement where both sides have security.

โ€œWhat we need is a regulatory framework that supports those goals. A balance must be found and it wonโ€™t be found if the Greens have their way,โ€ she said.

New rental arrangements forming part of the Greensโ€™ policy include:

  • Landlords would have to give 12 monthsโ€™ notice to end a tenancy agreement and even then only if the landlord or their family member was to move in
  • Tenants can terminate with three monthsโ€™ notice and give no reason
  • Tenants can undertake certain renovations without permission from the landlord
  • Landlords can only increase rents every two years and only by an amount determined by the Residential Tenancy Authority
  • A landlord could not terminate a tenancy agreement even if the property was being sold, meaning two-thirds of the property buying market (owner occupiers) would be eliminated from the transaction,

Ms Mercorella said the Greensโ€™ proposals were ludicrous and did not benefit Queenslandโ€™s rental market at all.

โ€œOne of the most common clarion calls of tenant advocates is that tenants should have the right to longer-term leases. But they already do,โ€ she said.

โ€œTenants have the right to negotiate a longer term lease with the landlord under the current legislation โ€“ but many tenants prefer flexibility and donโ€™t want to be locked into a rental agreement when their work situation is not secure.

โ€œQueensland has a very mobile workforce, with workers moving to find new employment following the resources downturn and the GFC, which negatively impacted many Queensland primary industries,โ€ she said.

โ€œIn the years of the mining boom, we saw workers flock to western Queensland to work in the mines, and once that boom ended, workers moved on in search of work elsewhere,โ€ she said.

โ€œLandlords in regional Queensland have been unsuccessfully trying to get tenants to take longer term leases.โ€

Vacancy rates through most of regional Queensland are high, which means conditions favour the tenant.

In Gladstone, the vacancy rate is 6.5 per cent. In Mackay, vacancies are at 4.5 per cent and in Rockhampton vacancies are at 7.2 per cent. This represents a weak market and tenants have the bargaining power but even in these areas tenants are not taking long-term leases.

Frequently turning over tenants results in lost rent and increased fees for the landlord as property management costs rise in connection with filling the vacancy.

โ€œThe Greens would have you believe that landlords are not accepting applications from tenants who want to secure their tenure, but itโ€™s absolutely not the case and this simply demonstrates how out of touch the Greens are with Queenslanders and the Queensland rental market.โ€

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