ACT investors threaten to sell in light of legislative amendments

According to the Real Estate Institute of the ACT (REIACT), just over a fifth (21 per cent) of investors in the territory told the Hear Our Voice Campaign that the proposed changes to the law would force them to exit the market.

The changes would, in effect, put in place “minimum standards for rental properties – as well as remove the power for no-cause evictions and make it an offence for landlords or agents to solicit rent bids”.

According to the institute’s chief executive Michelle Tynan, as well as impacting investors, she suggested tenants would actually be the biggest losers from the amendments.

Indeed, 79 per cent of respondents to the Hear Our Voice Campaign said that the cost of upgrading their properties to be compliant with proposed minimum standards would have to be passed on to the tenant and recovered through rent increases.

The institute explained that for many investors in the ACT, the cost of remediation and no-cause termination without any new protection provision makes the risk management and sustainability of the investment property untenable.

Should 10 per cent of investment property owners make good on their promise to exit the territory market upon the implementation of the new legislation, this could result in over 4,300 properties exiting the already tight and undersupplied rental market.

A separate Pegasus report on the ACT budget has previously warned that the effect on low-income renters – already gripped by cost-of-living pressures – could see many unable to compete in the rental market, thus forcing them into homelessness, paticularly given that the ACT housing’s wait list that already exceeds 3,000.

Ms Tynan expressed the REIACT’s disappointment at the fact that none of the recommendations submitted to the government during the consultation process were included in the latest draft bill.

“The institute is not against reforms for minimum standards and security of tenancy,” she implored.

“However, when policy is made on a data sample size that represents less than 1 per cent of those in the private rental sector, the unintended consequences will only result in very poor outcomes for rents in the ACT.”

[Related: NSW stamp duty reform is limited: PropTrack]