Victorian landlords threaten ‘mass exodus’ over proposed rental rules

Unhappy landlords in one Aussie state are raging over proposed changes to rental laws, with some going as far as threatening to sell their properties.

Landlord are up in arms over proposed changes to rental rules, with some even claiming the move could spark a “mass exodus” of investors.

Last week, the Victorian government proposed new minimum rental standards relating to energy efficiency across the state.

The proposed changes are in line with the government’s commitment towards net zero emissions by 2045 and would ensure that tenants are provided with “comfortable and energy efficient living arrangements”.

It would include things such as installing ceiling insulation where none exists, droughtproofing with weather seals on all external doors, four-star shower heads in all showers, new electric hot water systems and three-star efficiency cooling for systems in the main living area.

If introduced, the changes would start coming into effect from October 2025. Appliances would not need to be upgraded until the existing ones reach the end of their lives. Insulation and draught-proofing would need to be upgraded at the start of a new lease.

Many landlords are less than impressed by the proposal, with property investors taking to multiple landlord groups to express their outrage.

One homeowner called the plan “delusional”, claiming it may save tenants money on energy bills but it would drive up rents.

One added: “Renters will soon have better homes than some owner properties!”

Dozens of people line up to inspect a rental property. Picture: NCA NewsWire / Nicholas Eagar

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Another person claimed the government was trying to “bankrupt” landlords and one warned the move would only make the rental crisis “worse” for tenants.

“Sadly and frustratingly another incredibly foolish, ill thought idea by Labor that will only increase rents, forcing more Mum & Dad investors out of property investing, creating an even greater problem for renters,” one added.

There were many who branded the proposal just “another blow for landlords”, with multiple people claiming this would see many selling their investment properties rather than having to comply with the new rules.

“I reckon a mass exodus by landlords from the rental market. They are making a serious rental problem even worse. Timing is appalling,” one person said.

Another said that the Victorian government would see landlords continuing to sell their rentals if they kept introducing policies to “erode the freedom to do what you wish to your property”.

One person added: “Keep raising the costs to maintain rental properties and I can tell you myself and many more landlords will simply sell.”

“Enough is enough, they’re not helping the housing crisis. Keep lifting all these standards for tenants and landlords keep raising rents, then when you see how some tenants keep the house and their standard of cleanliness it’s a bloody joke,” they continued.

The proposed changes haven’t gone down well with Aussie landlords. Picture: NCA NewsWire / Gaye Gerard

In documents released on Monday, Commissioner for Better Regulation Cressida Wall confirmed there would likely be rent increases associated with the new policies.

“The departments acknowledge that it is likely that at least some of the costs will be passed on to tenants, and that recent cost-of-living pressures and interest rate rises may limit the amount of cost increases that rental providers and rooming house operators can absorb,” she said.

“The departments explain that rental supply may contract in the short term as providers undertake upgrades to comply with the new minimum standards.

“The departments also explain that these impacts will be limited by varying when compliance with each standard is required, and as some of the preferred options account for potential implementation risks (e.g. supply chain issues).”

The government estimates these proposed upgrades would save renters about $567 a year off their energy bills.

The announcement comes after data released last year from tenancy advocacy organisation Better Renting exposed the extreme living conditions and freezing temperatures renters were enduring across the country over the winter months.

The research found that 72 per cent of rental properties across the nation recorded temperatures below 18C, the minimum recommended by the World Health Organisation.

For more than three hours per day, Australian rental properties recorded colder temperatures indoors than out.

Better Renting researched 59 renters across the country to track temperature and humidity from June to August, comparing outdoor temperatures to indoor conditions.

The organisation’s deputy director Bernie Barrett said renters were “missing out” on safe and warm homes during the colder months.

“As our researchers have told us, renters are trapped in a powerless position where they can’t speak up for themselves and ask for even the bare minimum because they are beholden to the whims of landlords and real estate who hold all the power to potentially make them homeless,” he said.

“Rental homes in Australia are failing to meet minimum healthy temperatures, even during a warmer winter.”

The proposed changes to Victoria’s minimum rental standards are open for consultation from now until July 1, with a decision set to be made by October 2024.