ACT investors threaten to pull out of local market in light of legislative amendments

Ms Tynan, who recently slammed the government’s draft bill released on 27 July, which will 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”.

She also claimed in her initial criticism of the bill that tenants would be the biggest losers from the amendments, with this claim supported by 79 per cent of respondents outlining they will have to recover the cost of upgrading their property to be compliant with proposed minimum standards 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 for owners 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, that could result in over 4,300 properties exiting the already tight and undersupplied rental market.

Given the fact that Chief Minister Andrew Barr detailed the need for 5,000 properties to bring the vacancy rate from below 1 per cent to the healthy 3 per cent, the changes hinder the likelihood of this occurring.

Furthermore, the independent Pegasus report on the ACT budget supports the institute’s concerns, outlining 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, adding to 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 was 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.”