The Homes for Queenslanders plan, announced by Premier Steven Miles over the weekend, includes new protections for renters.
“More than one in three Queenslanders rent, which is why renters rights and supports are at the core of our Homes for Queenslanders plan,” Mr Miles said.
The reforms ban rent bidding – with agents who engage in the practice to be penalised - creates a framework for parties to agree on modifications to rental properties, and doubles the notice tenants must be given prior to a routine entry to 48 hours.
It also aims to instate a Code of Conduct for the rental sector, limit rental increases to once every 12 months – even if the tenancy changes, and implement a portable bond scheme.
While changes are intended to increase security for tenants battling an ever-dire rental market, issues addressed could be considered merely symptoms of a supply shortage.
That shortage is "the elephant in the room", according to Real Estate Institute of Queensland (REIQ) CEO Antonia Mercorella.
'Elephant in the room' of rental reforms
The expert noted that, if supply were to adequately increase, the reforms would quickly become redundant.
Changes to how bonds are taken and returned could create an “administrative nightmare”, while new reforms to how properties can be modified could leave homeowners vulnerable.
“For the fifth time in four years, the state government has decided to tighten rental legislation in a way that is squeezing the life out of investing in real estate in Queensland,” Ms Mercorella said.
The REIQ has been working closely with the Queensland Disability Network to conceptualise an appropriate framework for modifications in cases that changes are required for accessibility.
“Our position is that current laws governing modifications are appropriate,” she said.
“By introducing a ‘free-for-all’, there could be costly consequences for property owners."
Queensland already has restrictions on rent bidding, with property owners or agents unable to ask for offers higher than a mandatory listing price.
Though, many applicants have taken up rent bidding as a means to gain a competitive edge amid a continuously tight market.
Brisbane was found to have had one of the lowest vacancy rates in the nation in January, at 0.8% according to Domain.
Government should incentivise property investors: Experts
“The latest so-called ‘plan’ by the Miles government does absolutely nothing to increase rental supply,” Propertology head of research Simon Pressley told Your Investment Property.
“To the contrary, they’ve issued yet another layer of barriers.”
More than nine in ten rental properties in the Australian market are owned by everyday investors, he noted.
“Since 2015, governments have consistently introduced extra legislation and extra costs which increasingly make it less attractive for an everyday Aussie to invest in the provision of rental accommodation
“Rental suppliers have been bashed with baseball bats throughout the last nine years.
“Until such time as baseball bats are replaced with carrots, the rental pool will get shallower and shallower and the societal aggravation will continue to intensify.”
Portions of the Homes of Queenslanders plan have been welcomed by Ms Mercorella.
The Miles Government has unveiled $160 million of funding for a Renters Relief Package, to be dispersed over five years, and a new code of conduct for rental industry professionals.
“As the peak professional body for real estate professionals we would be supportive of a Code of Conduct being developed in close consultation with the REIQ and drawing from our existing Best Practice Guidelines that we promote to the real estate profession,” she said.
“However, it does feel ironic to see the state government suddenly calling for a code, when they haven’t provided a cent of funding towards training for real estate professionals, and they’ve dragged their heels on mandatory CPD.”
Ms Mercorella enthusiastically welcomed the financial aid for struggling renters, though she notes many of whom would likely be better off with different support.
“Some of these people should have been supported with social housing and are instead trying to compete in the private rental market,” she said.
“The Productivity Commission highlighted last year that Queensland has the lowest level of spend on social housing in the country. This is happening while the social housing register waitlist has exploded to above 40,000.”
It's a similar sentiment to that posed by Mr Pressley.
“The reason so many people are living in makeshift accommodation and that rents have increased so much is because active tenants have been forced to compete in a rental pool which is far too shallow,” he said.
“Politicians are great at standing on a podium and flapping their gums about something they claim to have done to improve housing supply, but the combined state, territory, and federal governments have added just 85,000 out of 3.6 million new homes over the last 20-years.
“From a Queensland perspective, in a state of 5.5 million people, the state government currently contributes a grand total of just 62,000 properties, many of which we assume to be little more than a modest one-bedder.”
Housing could be key issue in state government election
The Miles Government’s plan does include some initiatives designed to free up land for development and slice the red tape associated with building new homes.
It has put forward $350 million for the creation of an infrastructure fund to incentivise private market-feasible infill development.
It also plans to kick start a ground lease model, designed to see more social and affordable housing built on government-owned land.
“Research commissioned by the Property Council last year reinforced infrastructure charging relief as a key lever in facilitating development and fast-tracking new housing,” Property Council incoming Queensland executive Jess Caire said.
“It is pleasing to see the government has listened to industry’s feedback that more needs to be done to bolster the viability of new housing projects.”
Mr Miles’s announcement comes nine months out from the Queensland state election, of which housing looks set to become a key issue.
While the state government has put forward its housing plan, the state opposition has committed to increasing the stamp duty exemption threshold to encompass properties worth more than $500,000.
Meanwhile, the future vote of nearly 90% of Queensland renters could hinge on the rental market, according to 1,000 surveyed for the InfoChoice Rent Crisis Survey, with one in two saying that will be the case.
Interestingly, Australian renters mostly blamed the government for rent increases (37%), while property owners and the Reserve Bank of Australia (RBA) shouldered 32% and 24% of the blame, respectively.
Less than a quarter of respondents believe their landlord has been unfair with their rent, despite nearly 80% having been hit with a rent hike within the last 12 months.
Image by Josh Withers on Unsplash