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The REIV has warned mum and dad property investors to beware of Victoria’s changing residential tenancy rules, which could be a deterrent for future investment.
With more than 120 new landlord obligations said to come into effect on 29 March, mum and dad property investors in Victoria are said to be facing a “substantial” increase in the cost and time invested in managing their assets, the Real Estate Institute of Victoria (REIV) has warned.
Last week, the Victorian government released its Residential Tenancies Regulations 2021, which will underpin the Residential Tenancies Act of 1997.
The changing regulations will mean over 120 new landlord obligations are added just a day after the completion of the COVID-19 rental moratorium, requiring “extensive education” to help ensure the real estate sector is equipped to implement the changes effectively.
REIV CEO Gil King said the new standards will trigger an unbalanced regulatory burden on the rental market.
“Increasing ownership costs and making maintenance and management of property more complex is a deterrent for investment,” Mr. King said.
“New costs introduced through these changes are likely to result in higher rents and could see mum and dad investors exit this asset class, putting further pressure on rental availability and affordability for Victorians.
“The REIV has made these consequences known to property policymakers, so we are surprised to see even more of a pendulum swing away from investment property owners, now referred to as rental providers,” Mr King noted.
The new standards will, in many cases, require substantial changes to processes, documents and systems, meaning a fresh round of education is needed for the sector.
“For decades, real estate in Victoria has managed to play well with the cards it has been dealt, with the market’s performance in a coronavirus-stricken 2020 a good example.
“For this reason, we should have confidence that the competent people in the industry will manage through these changes and continue to contribute to a thriving sector,” Mr King concluded.
Real estate is a type of real property that refers to any land and its permanent improvement or structures that come with it, whether natural or man-made.