REIWA CEO Cath Hart today welcomed the McGowan Government’s announcement of rental reforms, saying they struck the right balance.
“In assessing housing policy, the big question is whether it will increase the number of homes that can be built, bought or rented,” Ms Hart said.
“While recent State Budget initiatives focussed on supply, we also need a legislative environment that sustains and encourages investment. This review has been on foot for several years now and has created significant uncertainty so we are pleased to be able to move forward.
“Investors make up about 85 per cent of the private rental market – and the majority of investors only have one property. Unfortunately, they have been leaving the market in significant numbers so there are nearly 20,000 fewer rental properties now than two years ago.
“This exodus has contributed to the vacancy rate falling to a 42-year low and rent prices increasing.
“Over the course of the review of the Residential Tenancies Act, REIWA’s aim has been to make renting possible, and the reality is that it’s not possible without investors. If investors aren’t confident about property, they will put their money into other assets and rental queues will remain long.
“The reforms announced today strike the right balance for owners and tenants. The next step will be to work through the detail of these measures, and we will continue to advocate for practical and pragmatic approaches to their implementation.”
Ms Hart said the Government’s rental reforms recognised the need for legislation that created an environment that encouraged investment while balancing the needs of tenants.
No grounds terminations
“No grounds terminations has been a particular concern for investors and potential investors and they will welcome the decision to leave this unchanged. It gives them certainty and they can move forward with confidence, knowing they can manage their asset appropriately,” she said.
“WA is a unique market and we are pleased the Government recognises this.
“Our housing is more affordable than other states and our tenants tend to spend a shorter time in the rental market before moving onto home ownership.
“Our resources-based economy also means our tenant population is more fluid, due to the transient nature of the FIFO workforce.
“The additional reforms announced today give tenants more certainty in their leases while supporting investment, which is essential to increasing supply and reducing queues at home opens.”
Limiting rent increases and banning rent bidding
The reforms announcement included limiting rent increases to once a year.
“We understand the difficulties facing tenants at the moment and that the Government needs to strike a balance between investors and tenants,” Ms Hart said.
“While rent bidding is not a significant issue among properties managed by REIWA members, it may occur in the private landlord market. The reforms will set a clear standard everyone must adhere to which should give tenants more confidence when looking for a rental property.”
Pets and modifications
Tenants will be allowed to have pets in rental properties in most cases and make minor modifications.
“Investors generally want two things: the rent paid on time and their property taken care of,” Ms Hart said.
“Meanwhile, tenants want to be able to make the house a home and have the freedom to own a pet.
“Many investors do approve and welcome pets – about one third of properties currently have a pet bond – but it needs to be the right pet for their property. They will still be able to withhold consent but only with the approval of the Commissioner for Consumer Protection and only within reason.
“We’re waiting to see the finer details of this reform and hope to see changes to the pet bond to cover potential damage to the property. We will work with government to ensure a fair and balanced outcome for all parties.
“When it comes to modifications, our previous research has shown investors are not hesitant to approve minor modifications, but their main concern is rectifying any changes at the end of the lease.
“The reform announced today addresses that concern, with tenants required to restore the property to its original condition at the end of the tenancy.”
Ms Hart said the announcement would give certainty to investors.
“It’s been a long road to reform and we welcome Minister Ellery’s speedy resolution of the matter since taking on the portfolio. We understand it’s been a difficult task balancing the needs of investors and tenants in unprecedented market conditions,” Ms Hart said.
“Whether you’re an investor or a potential investor, today’s announcement means you can now make an informed decision knowing the rules of the game.
“WA’s affordable housing is already attracting the attention of Eastern States investors and this balanced approach to rental reform will also give them more confidence in investing in our market.
“Now that we have a decision and a stable legislative environment, we may see some short-stay providers reconsider the benefits of listing their property in the long-term rental market.”
“The RTA review did make us wonder what we were going to do, especially with the cost of living increasing, so this has given us a bit of certainty rather than selling up,” said Ellenbrook investor Kirby Moore (pictured with REIWA CEO Cath Hart).
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Sourced from REIWA