Thereal estate industry regulator, part of WA’s Consumer Protection department, is a benevolent, well-meaning group, mandated to protect the interests of consumers.
They do genuinely good work, ensuring licensed real estate practitioners, along with other industry groups, conduct themselves in a professional and ethical manner and they’ll happily prosecute those that fail to do so.
The regulator has myriad additional tasks such as the issuing of agents’ licenses, managing tenancy bonds and advising the government on legislative and policy settings.
In recent times, it has become increasingly evident that the regulator considers the buyers and renters of real estate to be the consumer. Their language and sentiment towards sellers and landlords, who are also real estate consumers, has become progressively adversarial.
Part of this trend is evidenced in their review of the Residential Tenancies Act (RTA) currently being undertaken. Each of the dozens of points of review in the Act are squarely focused upon increasing the rights of renters to the detriment of property owners.
This might be a reasonable thing to do if the current laws were substantially skewed in favour of property investors. The current RTA already favours tenants. Take, for example, the tenant’s right to end a periodic tenancy by giving 21 days’ notice, whereas the owner must give 60 days’ notice.
Of course, the tenant / landlord relationship is, by its very nature, one of inequity. The property investor enjoys the ultimate right of titled ownership, but they also carry the risks in doing so. The RTA tries to ‘square the ledger’ somewhat, giving tenants additional rights accordingly.
The regulator wants to take additional steps in this direction, affording more rights to tenants by taking them away from property owners. For example, it is proposed to outlaw ‘no reason’ ending of tenancies at the conclusion of fixed terms and to allow tenants to make minor alterations to properties without permission.
These sorts of proposals will inevitably impact a rental market already starved of sufficient rental stock, hence a current vacancy rate in Perth of about 1 percent. Rents have risen about 15 percent in a year. Meanwhile, investors are jettisoning their rental properties in large numbers, fed-up with negligible capital growth and poor returns. Add more risk by removing additional rights from investors and they will simply go elsewhere; the share market, commercial property, funds management and the like.
And this is the heart of the problem, the regulators’ push for renters’ rights will reduce the number of investors, limit rental stock and push up rents even further. It is hard to make sense of why the only solution advocated by the government advisor to the so-called rental crisis is a disproportionate increase in tenants’ rights.
It would appear that the pursuit of ideological consumer protectionism is blind to the obvious option of supporting private property investors in providing sufficient rental stock to the market. With the ratio of government owned to private owned rental stock at 1:12, it is about time the regulator found some balance and treated landlords and tenants equally.
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