The state government has introduced its first tranche of tenancy law changes designed to further protect renters in the face of stubbornly low vacancy rates, rising rents and ongoing supply shortages.
As national debate about the ‘housing crisis’ rages on, becoming more political by the day, the frustrations of those impacted by housing affordability constraint continues to rise. Thankfully, everyone agrees that the lack of housing supply goes to the heart of the problem of housing affordability, yet there is yet to be substantive, needle-shifting policies from our state or federal governments that has meaningfully focused on this core issue. So far, we’ve seen a series of back-slapping fringe policies that are either promissory or tinker around the edges.
there’s no law against being a rude, vindictive narcissist
For example, the federal government’s promise of building 1.2 million new affordable homes by 2029 came off the back of protracted negotiations with the Greens over the Housing Australia Future Fund; a political promise that sets a wildly ambitious construction target. Housing approvals over the past five years reached about 925,000 boosted by the HomeBuilder grants of 2020/21. The trajectory for new approvals is troubling for adding supply having fallen back (down 9.5% in December) sharply as construction material costs continue to rise, up 32.5% since 2020. Add to this rising inflation elsewhere in the economy, poor productivity, NIMBYism, high property taxes, planning constraints, lack of building innovation, higher interest rates and falling employment, we’ll miss the 1.2 million home target by miles.
Meanwhile, our state government celebrates fringe policies such as the $5,000 landlord incentive for property owners who, after having their ‘extra’ property lay empty for six months, can claim the $5k for putting in a tenant. Our Treasurer reckons this could add an additional 1000 homes to the rental pool. Sorry, but anyone that can afford leave their investment property empty for six months, won’t be swayed by five grand.
Other government actions around housing included changes to the Residential Tenancy Laws, two of which came into effect this week. Firstly, there is now a ban on ‘rent bidding’. This effectively means landlords and property agents are banned from encouraging tenants to “pay extra” to secure a rental home. Nor can properties be advertised at a “from” weekly rent. The intention is sound but in response, initial asking rents will rise to account for the competition in the market. Tenants can still offer more than the asking rent if they choose to.
The second new law is referred to as the ‘retaliatory rule’ whereby a landlord cannot respond to reasonable requests from a tenant regarding property maintenance and other matters by not renewing the lease, for example. Some tenants can be unreasonable to deal with and there’s no law against being a rude, vindictive narcissist. It will be interesting to see how the new law deals with circumstances like this where the property owner seeks to not renew a lease on the grounds of their tenant being unreasonably difficult.
There is no quick fix to the housing crisis, but every effort to add supply to the housing stock in an affordable way must be the priority.
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