REAL estate investment in the Wellington Shire is a hot topic in 2021, as property speculators take advantage of low interest rates and snap up homes at less than half the cost of those in metropolitan areas.
But new tenancy laws due to come into force at the end of March are sending waves of unrest through the industry, with landlords struggling to understand them and real estate agents calling for an end to the “misinformation”.
It was full house at a seminar recently held in Sale to clarify the details of the Residential Tenancies Act.
According to seminar convenor, Lia Jagielka of Coronis Real Estate, much of the media “misinformation” about new laws has implied that landlord protections have been whittled away, and owners will have little say on what happens to their properties.
Ms Jagielka said landlords and potential investors needed, and wanted, the information that would enable them to navigate the new tenancy laws, and make informed decisions on whether property investment was a good fit for them.
Sale and the wider Wellington Shire has long been a magnet for property investors attracted by low property prices and good rental demand.
Ms Jagielka said some local property owners had multiple properties, and were significant contributors to the availability of stock in the rental arena.
And with renters still exceeding the number of people buying property according to industry experts, there is likely to be ongoing demand for more rental properties in the region.
Real Estate Institute of Victoria chief executive Gil King recently said the rental vacancy rate in Wellington Shire, and neighbouring East Gippsland, was among the lowest in regional Victoria at 1.2 per cent, having decreased considerably from 3.6 per cent in 2019.
And last year, regional rental vacancy rates had dropped to just under two per cent across regional Victoria.
Ms Jagielka said it was essential that the public and potential buyers understood the new tenancy laws, to avoid intentionally dampening the residential investment market.
But, she said the way the new laws had been marketed made it sound like they are all in favour of the tenant.
“I think that landlords should have confidence that protections are available for both tenants and owners,” she said.
About 70 people attended the information session, held at the Criterion Hotel in Sale, to hear from industry experts and have the opportunity to ask for details about buying, renting and financing property.
Ms Jagielka said some of the buyer concerns included the removal of the 120-day notice requirement for evictions, and the requirement for landlords to apply to the Victorian Civil and Administrative Tribunal to refuse pets in a property.
“But evictions are not banned,” she said.
“That option is still available, and going to VCAT is not what is used to be, it’s all via telephone these days, so it might just be 20 minutes out of your day if you are a landlord needing assistance.”
Michael James, the rental manager at Heart Property – which manages 350 to 400 rental properties – said while the majority of property owners did the right thing and worked through agencies, there were still some landlords who chose to privately offer sub-standard properties and who were potentially opening themselves up to litigation by not following the rules.
“These rules provide protection for all parties, and it’s essential to keep informed – anyone wanting to act outside of the rules risks being prosecuted,” he warned.
Some of the new rules included in the revised Residential Tenancies Act include:
Compensation for sales inspections – a minimum of $30 compensation is required to be paid per inspection;
Tenants will be able to keep a pet, but must seek permission from their landlord;
Two-yearly mandatory gas and electrical safety checks; and
Renters can make prescribed modifications without the rental provider’s consent, and some modifications cannot unreasonably be refused.
Mr King said the looming changes to the Residential Tenancies Act in Victoria were significant, and it was critical for landlords to get across them.
Symbolic of the sweeping reforms is a title change for landlords following the March 29 introduction.
From then, landlords will be known as ‘residential rental providers’, and with that new label comes 132 changes to the tenant-owner relationship, including increased cost, obligation and consequences for owners.
While many of the reforms are reasonable, and indeed are requirements that smart and reasonable investors already obliging on, the REIV says it’s the volume of change occurring at once that could be overwhelming.
It has prepared a guide to help ensure property owners are up to date on the raft of changes.
But the changes aren’t as simple as picture hooks and pets, as some reports have suggested, Ms King said.
“They will be significant for the sector and impact renters and owners equally,” she said.
The REIV recommends residential rental providers, in particular, work with their property managers to understand the new requirements to help ensure they continue to get value and enjoyment out of their property investment.