New tenancy laws could spell more rental market pain for the Gold Coast

New legislation, including landlords having to accept pets in their rental properties, could be enough to deter investors – shrinking the rental pool even further.

New tenancy laws mean landlords will no longer be able to discriminate against tenants with pets. Picture: David Caird

ANALYSIS
THERE is no doubt those in the rental sector are feeling the hardest pinch from the current housing crisis.

Many investors chose to exit the market during the region’s house price juggernaut, giving up precious housing to owner-occupiers desperate to buy into what they thought was a golden ticket to Covid lockdown freedom.

Combine that with what was fast becoming an unaffordable housing market for many and the affect on an already stretched rental market pushed vacancy rates to record lows and rents to record highs.

Recent migrant data published in the Gold Coast Bulletin last week showed that rental searches from overseas spiked by a whopping 71 per cent nationally in June, with the Gold Coast being the most popular destination.

New tenancy laws may push landlords out of the market putting further pressure on rental accommodaton.

This influx of mainly migrant workers and students will all need to be housed. The question is where, when those already in the region are struggling to put a roof over their heads.

Yet the Gold Coast hasn’t even started to feel the ripple effect of a new set of rental law reforms coming in to effect in Queensland on October 1.

At a time when investors are finally starting to re-enter the market, leading to growth in the rental pool, these legislative changes could potentially frighten them off.

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Real Estate Institute of Queensland CEO Antonia Mercorella said one of the more damaging changes was the removal of the right for property owners to end a periodic tenancy simply by providing notice.

“We wouldn’t be surprised if periodic leases become extremely rare if not extinct in Queensland, which is a shame given the flexibility they offers tenants and lessors,” she said.

Periodic tenancies can benefit both parties, so the change to the law would tie tenants and landlords into contracts with costly implications should a lease need to be broken. Not very appealing.

REIQ CEO Antonia Mercorella: “Heavy-handed legislative reform could have unintended consequences.”

Another change will be a landlord’s ability to reject tenants on the grounds of pet ownership, which they will no longer be able to do.

According to the Choosi Pet Lovers Report, 79 per cent of renters reported that being a pet owner made it more difficult to find somewhere to live, so while this would be a welcome change for tenants, not all landlords may feel the same way.

Of more than 1200 rental properties on the Gold Coast currently listed on realestate.com.au, only 225 landlords would consider tenants with pets.

The potential risk of pet damage to a rental property and its value, may simply be enough to push some landlords to leave the market, shrinking the rental pool further.

Ms Mercorella said that the Sunshine State was a great place to buy property, but it was important to recognise that the more property owners’ choices were restricted, the less appealing of an investment option it became.

She said heavy-handed legislative reform that disrupted the delicate balance of contractual rights between tenants and property owners could have unintended consequences for the entire rental market.

“While we understand that there needs to be protections available for tenants, finding the right balance is important, because we do heavily rely on private investors when it comes to housing Queenslanders.”