Proposed changes to the Residential Tenancies Act in the ACT could lead to one in five investors selling their rental property.
According to The Real Estate Institute of the ACT (REIACT), landlords in the ACT are concerned proposed changes will reduce their rights and increase costs.
REIACT Chief Executive Officer Michelle Tynan said data from the Hear Our Voice Campaign showed 21 per cent of investment property owners said they would sell their investment property if proposed amendments to the Residential Tenancies Act came in.
While 79 per cent would have to recover the cost of upgrading their property, to be compliant with proposed minimum standards, through rent increases.
The proposed changes include the removal of no cause evictions, while also making it an offence for landlords or agents to solicit rental bids.
The bill also introduces mandatory minimum property standards, such as energy efficiency standards, and seeks to ensure tenants can easily grow food at their rental property.
Ms Tynan said the proposed changes to the Residential Tenancies Act had not been fully considered.
“The Institute is not against reforms for minimum standards and security of tenancy, however, when policy is made on a data sample size that represents less than 1 per cent of those in the private rental sector, the unintended consequences will only result in very poor outcomes for renters in the ACT” Ms Tynan said.
The Institute said the cost of remediation and the loss of no cause termination, without new protection provisions for owners under the Draft Bill, made the risk management and sustainability of investment properties untenable for many owners.
Currently, there are 43,378 bonds registered with the ACT Bond office.
If just 10 per cent of investment property owners actually sell their property, that could lead to more than 4300 properties being removed from an already undersupplied private rental market.
The ACT chief minister Andrew Barr stated in his Budget address that the Canberra residential rental market required a further 5000 properties to bring the vacancy rate from below 1 per cent to a healthy 3 per cent level.
According to the REIACT, the effect on renters with lower incomes, who are already facing cost of living pressures, will be that they will be unable to compete in the ACT rental market and may result in homelessness.
ACT Housing already has a waiting list of more than 3000 and community housing providers are also feeling the pressure of trying to find suitable properties in the private rental sector.
Ms Tynan said that so far the ACT Government hasn’t incorporated the REIACT’s recommendations.
“The Institute has participated in the consultation process since the beginning of 2020 and was disappointed when none of their recommendations submitted to the ACT Government were included in the new Draft Bill,” she said.
