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Proposed rental reform detrimental to landlords, tenants

05 January 2020 Lyall Russell
Cathie Crampton

The Queensland government has pitched its rental reform proposals as a way to ensure safe and secure housing for tenants, but one property management leader believes it will not help.

“The impact of the current recommended reforms is not only concerning for owners and tenants but will absolutely be detrimental to all parties to a tenancy,” Place Property Management director Cathie Crampton told Real Estate Business.

Last year, property market research firm Propertyology crunched the numbers under the current proposals and found it could cost tenants an extra $5,000 a year in rent.

Ms Crampton’s concerns with the proposals include the allowance to allow tenants to make modifications to a property without the need to remedy it at the end of a tenancy; the removal of an owner’s request to end a lease when it expires; and allowing pets on any property.

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“[This will mean] investors will look to other classes of investment, and the supply will further diminish, so rents will increase dramatically,” she said.

“Insurance costs will increase due to the clauses [regarding] pets and property modifications, and again these costs will be passed onto tenants, which means more rent increases and less available supply for the vast majority.”

Ms Crampton has heard from landlords who voiced their concerns about the viability of their investments in the rental market if these proposals become law.

As a result, if landlords hold onto their rental property, they will be forced to take significant losses on their investment, while they pay loans and other costs, she said.

“Many owners must have a strong commitment to remain in the housing market anyway,” the director said. “These reforms, if adopted, will mean many owners will decide it’s is simply too hard to remain in the market and will exit, thus diminishing supply even more and causing rents to rise rapidly.

“A massive disadvantage for the tenants whose numbers are actually increasing.”

Ms Crampton’s advice to the government is to stop trying to place private investors in the position as a “glorified compensator for social housing”.

“To ensure a sustainable housing provision of the ever-increasing tenant numbers, owners who need to ensure sustainable occupancy must be able to ensure their property can support the occupants who choose to live there,” she said.

She would like to see the government incentivise developers and owners to provide a variety of housing products that can be rent-controlled to support those who need it.

“Pushing their responsibilities onto a private owner only forces the private owner to necessarily reassess their ability to maintain any sense of reason to remain in the market,” Ms Crampton said.

“The government’s role is to regulate policy reflective of all interests, but these reforms are a case of the government trying to absolve themselves of their social responsibility and results in all tenants and owners being disadvantaged.”

Proposed rental reform detrimental to landlords, tenants
Cathie Crampton reb
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