Rita Panahi: Vic Labor’s war against property investors is intensifying

Victorian Labor’s war against property investors is intensifying, with a raft of costly and onerous new measures that are certain to see rental prices soar further and more landlords exiting the market.

Victorian Labor’s war against property investors is intensifying with a raft of new measures that are certain to see rental prices soar further and more landlords exiting the market.

Of course that’s not the goal of the Jacinta Allan government but that is undoubtedly what will occur if they press ahead with a plan to impose an onerous and costly list of minimum standards, on top of existing requirements, on landlords.

This week state Labor proposed that from October 30 next year all residential rental properties must provide airconditioning, ceiling insulation, draught proofing, blind cord safety anchors and efficient shower heads.

Additionally, when gas appliances such as hot water systems and heaters fail, they must be replaced with electric options. If this plan is adopted expect to see fewer rental properties available and rents to increase, dramatically in some cases.

Energy Minister Lily D’Ambrosio has estimated the cost of all upgrades for landlords to be around $5000. Picture: Luis Enrique Ascu

In the ham-fisted fashion we’ve come to expect from this government they are proposing policies that will achieve precisely the opposite of their stated goal of alleviating cost of living pressure for renters.

“We are looking at annual dollar savings on tenants’ bills of around $330,” said Energy Minister Lily D’Ambrosio who estimated the cost of all upgrades for landlords to be around $5000.

Clearly, D’Ambrosio has a tentative grasp on mathematics or has little idea how expensive such works are in the current market. But even if her figures are right, any savings that a tenant might see from reduced energy bills would be dwarfed by the rental increase they’d face.

If a landlord is spending $5000, and demand for rental properties continues to soar with population growth and landlords exiting the market, then the simple rules of supply and demand dictate that the annual rent increase will be significantly more than $330.

Figures released earlier this month show that three-quarters of the state is experiencing “extreme rental pain” with rents increasing faster in Victoria than the national average.

Expect that trend to continue if the Allan government imposes this latest harebrained scheme.