REIQ slams ‘investment killer’ rental reforms proposal
The Greens and the Real Estate Institute of Queensland have butted heads over proposed rental reforms, which the latter has termed “simply ludicrous”.
The Queensland Greens has introduced rental reforms into Parliament, flagging them as a necessary response to current tight vacancy conditions, but the REIQ argued that the proposal will only exasperate the already tough conditions.
“With Queensland’s rental market under enormous pressure as more people choose to both remain as well as make Queensland their new home, it’s critical we continue to attract property investors to improve rental supply and keep pace with demand so as to maintain rental affordability,” said Antonia Mercorella, CEO of the REIQ.
“What we don’t need is ludicrous rental reform proposals like we’re seeing from the Greens.”
Some of the key proposed rental reform items in the bill include capping rent increases to once every 24 months, scrapping “no grounds evictions”, banning rental bidding, and allowing tenants to make property alterations without permission from the lessor.
According to Ms Mercorella, the Greens’ reforms would see investors hit by “untenable arrangements”.
“It’s completely unrealistic to expect that lessors will continue to invest in Queensland real estate if faced with untenable arrangements that don’t allow them to protect the value of their asset and strips them of fundamental decision-making powers and rights,” Ms Mercorella said.
She termed the abolishment of a lessor’s right to not renew a tenancy agreement at the end of its agreed term as the “most damaging reform”. In practice, this would allow a tenant to remain in a tenancy indefinitely and for as long as they wish unless the lessor can establish one of two grounds under the Greens proposal.
Ms Mercorella believes that, as a result, no lessor will choose to invest in Queensland property.
“This reform has been cleverly disguised by the Greens as the abolishment of “without grounds terminations or evictions,” Ms Mercorella explained.
“Investors have a range of options open to them, including shares and other asset classes. If their rights to manage an investment property are removed they’ll simply choose to invest elsewhere. What we need is a regulatory framework that provides security for both tenants and lessors. A balance must be found but it won’t be if the Greens have their way,” she said.
Moreover, Ms Mercorella argued that rental caps don’t do anything to resolve the reason rents are rising, which, according to her, is because there are more people who want to live in Queensland than there are dwellings for them to currently live in.
“That’s the highest level of net interstate migration Queensland has seen for around 20 years,” Ms Mercorella added.
“We’ve also seen fewer people leaving Queensland, with departures at their lowest level since December 1994. Furthermore, in addition to high internal migration and low departure rates we’ve also seen the return of around half a million expats since the onset of the pandemic.”
Demanding more incentives to better support both increased and ongoing property investor activity in the Queensland property market, Ms Mercorella said rental demand will reach its limit and a shift in momentum will see rents decrease.
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