INDUSTRY NEWSQLD Real Estate NewsReal Estate News

Will Queensland’s portable bond scheme be a welcome reform or a nightmare?

The Real Estate Institute of Queensland (REIQ) has welcomed a State Government bridging bond loan initiative to help get more renters into properties, but labelled the introduction of a portable bond scheme as an “administrative nightmare”.

REIQ Chief Executive Officer Antonia Mercorella said overall, the Homes for Queenslanders package introduced more legislative reform, but didn’t address the rental market pressures created by a lack of new social housing and private rental supply.

Under the plan, Queensland Premier Steven Miles said $160 million would be invested in a Renters’ Relief Package over five years, including a portable bond scheme allowing tenants to transfer their bonds when moving from one rental property to another.

While this scheme is being established, a Bridging Bond Loan product will be introduced to assist renters to afford the upfront cost of a new bond, pending the release of their old one.

“More than one-in-three Queenslanders rent, which is why renters rights and supports are at the core of our Homes for Queenslanders plan,” Mr Miles said. 

“Our plan makes sure Queensland renters get a fair go and have the supports they need to ease the costs of keeping a roof over their head.”

Ms Mercorella said she was highly supportive of the financial aid to assist tenants with their bonds but said the portable bond scheme itself could be problematic.

“For the fifth time in four years, the State Government has decided to tighten rental legislation in a way that is squeezing the life out of investing in real estate in Queensland,” Ms Mercorella said.

“With this round of reform, they’re creating an administrative nightmare with portable bonds, and potentially opening the door to tenants making modifications to rental properties without the consent of the owner.”

Under Homes for Queenslanders, renters’ rights would be strengthened through amendments to rental laws, including creating a framework for parties to agree on installing modifications in rental properties, and protecting renters’ privacy by requiring 48 hours entry notice and a prescribed for to be used to apply for a rental home, with information collected to be handled securely.

Reletting costs would also be limited and based on how long is left on a fixed term lease, and there would need to be a fee-free option for tenants to pay rent, along with choice on how they apply for a rental.

“Our position is that current laws governing modifications are appropriate – tenants require the consent of the property owner and the owner cannot act unreasonably – but by introducing a ‘free-for-all’, there could be costly consequences for property owners,” Ms Mercorella said.

“We’ve been working closely with QDN (Queensland Disability Network) on an appropriate framework to apply in the case of a modification being required for accessibility reasons.”

Mr Miles said the package would also ban rent bidding and penalties would be enforced against agents who engaged in or encouraged such practices.

Ms Mercorella said some of the legislative reforms appeared to be more for show than of real substance.

“We already have strict legislation surrounding rent bidding in Queensland, which requires a listing price be advertised and prevents real estate professionals from asking for offers above and beyond that,” she said.

“What this reform proposes to do, is to prevent rental applicants from offering more for a property to create a competitive edge. 

“This practice has emerged due to the very tight rental market.

“If you fix supply, history shows that affordability stays in check because people aren’t compelled to offer more to increase their chances of success among a big pool of applicants. 

“A focus on supply would render most of these reforms redundant.”

Mr Miles said a new rental sector Code of Conduct would also be explored, something Ms Mercorella said the REIQ supported.

“As the peak professional body for real estate professionals we would be supportive of a Code of Conduct being developed in close consultation with the REIQ and drawing from our existing Best Practice Guidelines that we promote to the real estate profession,” she said.

“However, it does feel ironic to see the State Government suddenly calling for a code, when they haven’t provided a cent of funding towards training for real estate professionals, and they’ve dragged their heels on mandatory CPD – something we’ve been advocating for over a decade.”

The Queensland Government has also announced new initiatives to deliver more homes for Queenslanders faster.

This includes $350 million for an Incentivising Infill Fund to encourage development in underutilised areas, close to jobs, services and facilities. 

The government has also said it will partner with the industry to unlock more social and affordable homes on state-owned land through a new pilot Ground Lease Model.

Show More

Kylie Dulhunty

Kylie Dulhunty is the Editor at Elite Agent.