‘Rent capping by stealth’: Expert says govt reforms add to ‘nonsensical’ regulation list

Real estate experts are warning the Andrews government’s new rental reforms could drive more landlords out of the market. But some renters say the changes haven’t gone far enough.

Landlords will be forced to extend eviction notice periods by an extra month and will face new restrictions on rental increases in a move described as “rent capping by stealth”.

In a major win for Victorian renters, the minimum period for notices to vacate will increase from 60 to 90 days as part of a suite of bold new housing reforms by the state government.

Landlords will also be barred from increasing rents for new tenants within a 12-month window of issuing a notice to vacate to previous tenants.

The state government on Wednesday said the changes would stop landlords from churning through renters and give tenants more certainty.

Real Estate Institute of Victoria CEO Quentin Kilian accused the government of ‘rent capping by stealth’. Picture: Che Chorley

But Real Estate Institute of Victoria CEO Quentin Kilian said the changes needed urgent review, accusing the government of “rent capping by stealth”.

“It is certainly not going to give any comfort to rental providers, many of whom are already leaving the market. But we’re more concerned about those that are sitting on the fence,” he said.

“Adding additional regulatory burdens is not going to keep them in the market.”

Mr Kilian said the “excessively long” eviction notice period proposed by the government would add to the massive list of “burdensome” and “nonsensical” regulatory processes for rent providers.

“It shows how imbalanced the regulatory environment is because you’re now expanding the ability of the landlord or rent provider to three months to evict a tenant yet at the same time a tenant to give a rent provider 14 to 28 days notice to vacate the property,” he said.

“Renters can jump in and out of leases at will.”

Daniel Andrews couldn’t provide any detail about the eviction notice extension on Wednesday but denied the reforms would protect “bad tenants”.

“This is not designed to protect bad tenants. This is about protecting people who are being treated badly by landlords,” he said.

The changes come just two years after the Andrews government introduced 130 rental reforms, including banning evictions without a reason.

Daniel Andrews revealed the government’s Housing Statement on Wednesday in Kensington. Picture: Luis Enrique Ascui

The raft of proposals revealed on Wednesday also included making it illegal for agents and landlords to encourage offers higher than the advertised rental prices, and plans to enable tenants to carry their rental bond from one property to another, rather than having to pay a new bond each time.

In an effort to cut VCAT wait times, a new body will also be formed – Rental Dispute Resolution Victoria – to handle tenancy disputes over rent, damages, repairs and bonds.

The Premier dismissed concerns the new dispute resolution system will favour tenants.

“Well, it’ll be a lot about tenants but it will also be good for landlords as well because sitting on a waiting list at VCAT doesn’t benefit anybody,” he said.

Tenants Victoria said struggling renters desperately needed the reforms, despite the state government rolling out 130 rental reforms in 2021.

“Housing is an essential service and a human right,” CEO Jennifer Beveridge said.

“The goal to build 800,000 homes in a decade – including boosting much-needed affordable and social housing stock – is certainly bold and hopefully can be achieved on time.”

Renee Feehan, a renter who was forced to couch surf with her partner and two daughters after being evicted from her last rental, said the shift from 60 to 90 days could have prevented her from becoming functionally homeless.

“The amount of people made homeless because of it was disgusting,” Ms Feehan said.

“Longterm tenancy shouldn’t be a fight, it should just be.

“It is so hard to afford to buy a house, especially when things don’t go as planned.”

But Victorian Greens leader Samantha Ratnam said the government’s reforms hardly scratched the surface.

“The Premier has just abandoned thousands of renters,” she said.

“Without a rental freeze or cap on rents, we’ll see more rental stress and more people pushed into homelessness.”