Increasing demand for rental properties across Victoria has seen vacancy rates in regional Victoria drop below the milestone 2 per cent, new REIV data shows.
The state’s lowest vacancy rates of just 1 per cent were recorded in Bendigo and Loddon, followed by Wodonga and Ovens-Murray at 1.4 per cent.
Low vacancy rates were also recorded in the Geelong and Barwon region as well as Ballarat and Central Highlands, at 1.5 and 1.6 per cent, respectively.
CEO Gil King said that there are a combination of factors leading to the low vacancy rates, not least of which are the state’s proposed tenancy reforms.
“While a healthy vacancy rate is typically around 3 per cent, high population growth combined with [the] legislative changes for investors are impacting on supply,” the CEO said.
“Significant reform of the Residential Tenancies Act was announced late last year with 14 reforms highlighted — all of which increased the rights of tenants at the expense of property owners.”
Mr King said that while these changes are only proposed at this stage, draft legislation is expected in the coming months.
He also said that the proposed changes might be problematic.
“While the REIV acknowledges that reform of the 20-year-old legislation is needed, changes that overwhelmingly favour one party will not improve relationships between stakeholders.
“It will also not increase the supply of rental properties. In fact, it is likely to reduce supply which will increase competition, ultimately resulting in greater screening of tenants and higher rents.”
Mr Gil said that there is a lot at stake.
“It’s important for the government to remember that property owners have a significant financial asset at stake, with regional Victoria’s median house price hitting a record high $396,500 in December.
“These investors also contribute to the state’s coffers by way of land tax. Balanced legislation is essential for a sustainable private rental market.”
Accordingly, Mr King said that the REIV has established a petition calling on the government to amend these changes. It has more than 11,000 signatures to date.