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REIV warns new rental standards may overburden landlords financially

The Real Estate Institute of Victoria (REIV) has urged the State Government to consider the introduction of proposed new minimum rental standards carefully, stressing that many landlords may not be able to afford them.

The call comes after the Victorian Government announced a consultation process for proposed new minimum rental standards designed to drive down renters power bills and keep them warmer in winter and cooler in summer.

The measures includes requirements for ceiling insulation, draught proofing, hot water and cooling efficiency.

REIV President Jacob Caine said the institute would participate in the Allan Government’s consultation process. 

He said while the institute welcomed the sentiment behind improving the energy efficiency of Victorian homes to reduce carbon emissions, the delivery of new requirements must avoid placing further financial strain on rental providers, many of whom are ‘mum and dad’ investors already facing tough operating conditions.

“While we recognise these changes are needed to help realise the state’s net zero targets, the new requirements also come at a time when many rental providers may not be able to afford to make them,” Mr Caine said.

“The costs of retaining an investment property have risen very sharply in recent times.

“We’re asking the government to be mindful that any further financial burden on rental providers could see them sell those homes, placing more strain on an already depleted rental property ecosystem.

“These are complex issues and similarly complex changes that require adequate time and consideration to ensure implementation is efficient and effective; as such, we urge the government to allow more time to analyse and understand the impacts on the sector.

“We welcome the opportunity to participate in the consultation and will be discussing the proposed changes with our members as part of our submission.”

Minister for Consumer Affairs Gabrielle Williams and Minister for Energy and Resources Lily D’Ambrosio said the proposed changes included rental providers needing to meet minimum requirements for ceiling insulation if there is none already installed, including draught sealing including weather seals on all external doors and replacing hot water and heating systems with energy efficient electric appliances when their current appliance reaches the end of its life.

Combined, these measures are expected to save renters more than $780 a year.

The standards would also introduce a 3-star cooling rating for systems in the main living area, 4-star shower heads in every shower and blind cord anchors. 

“The proposed standards will make rental properties safer and more comfortable – giving renters peace of mind for both the winter and summer and driving down costs,” Ms Williams said.

She said renters and landlords could currently access the Victorian Energy Upgrades (VEU), which offers discounts to upgrade old gas appliances to more efficient electric appliances.

The proposed new standards would be phased in to allow rental providers adequate time to adjust and comply, with compliance starting from 30 October 2025.

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Kylie Dulhunty

Kylie Dulhunty is the Editor at Elite Agent.