The Hon. Beverley McArthur, Member for Western Victoria, Media Release, 7 July 2023

The Victorian Government’s tax-hungry budgets and burgeoning compliance laws for landlords are creating hardship for renters.

Recent newspaper reports discussing PropTrack figures show the median unit cost in Melbourne was $400/week a year ago and is now $495/week.

Member for Western Victoria, Bev McArthur, says rental stress is also being felt across regional Victoria.

“The recent Victorian 2023-24 Budget lowered the land tax threshold for investment properties to $50,000, effectively catching another 380,000 homeowners in its net,” Mrs McArthur said.

“While some would be holiday homes, many are rental properties, and the owners will have little choice but to recoup that cost of about $1,500 a year in their rents.

“That hurts the rental market right at the same time as the cost of living is surging especially in gas, electricity and food bills.

“But the Andrews Labor Government has zero grip on reality.

“Its land tax imposition converges with about 130 compliance changes and regulations for rental properties.

“For some properties, this will require a complete re-wiring. It’s cost prohibitive.

“Add to this the talk about rent freezes and caps.”

Mrs McArthur is also a member of the Legislative Council Economy and Infrastructure Committee.

During a hearing in May, she asked Andrew Meehan, the President of the Real Estate Institute of Victoria, a series of questions resulting in the following
exchange:

Bev McArthur: The anecdotal evidence I get from constituents is that the regulations that impact a landlord, along with the inability to remove a recalcitrant tenant, are a major disincentive for investors in the rental market – added to extra taxes – and they will either sell the property or turn it into Airbnb. Is that something you have come across?

Andrew Meehan: That is certainly something we have seen in the market with the 130-odd changes to the Residential Tenancies Act. From a personal perspective we certainly saw about 10 per cent of our rental providers now – they are no longer called landlords –

Bev McArthur: That would be sexist, I suppose.

Andrew Meehan: It is elitist or something. We saw about 10 per cent leave the market because it was just sort of too much for them.  What really has to happen is that governments need to recognise that the majority of our rental stock is coming through private investors and the more we disincentivise those people in the market from holding investment properties, we are going to see a shortage of supply, which is what we are seeing, which will lead to higher rental prices.

Mrs McArthur said the trifecta of mortgage stress, rental compliance and tax increases, will result in ‘rental providers’ seeking easier financial options.

“Remember also, that the vast majority of rental properties are leased out by Mum and Dad investors to supplement their existing income and provide for a self-sufficient retirement stream. And not, as the naysayers would argue – super rich big-time landlords with vast rental portfolios. 

“This rental crisis will become increasingly obvious in regional cities like Geelong, Bendigo and Ballarat as we draw closer to the Commonwealth Games.

“These are host cities.

“Consider Ballarat: soil contamination is resulting in a nightmare for the 1,800-bed Athletes’ Village. Another 750 rooms need to be found for police and emergency personnel, another 450 for bus drivers.

“Subsidiary members of the athletics teams will also need beds, as will support crews and family members.

“I’m advised the Government has effectively booked-out Ballarat accommodation for the March 2026 Games.

“So where will the thousands of expected visitors stay – the so-called hordes that are supposed to be the regional Games’ financial golden geese?

“I am being told by regional investors that 25 per cent of Ballarat’s accommodation needs for the Commonwealth Games will be provided by a transition from rental homes to Airbnb.

“These properties don’t need to comply with the government’s severe rental regulations, and they can charge a heap more.

“Why wouldn’t rental providers make the switch?

“So, in case people thought it was already hard enough to find a rental home in the regions, get ready, because it’s about to get a whole lot harder,” Mrs McArthur said.