The changes to the Residential Tenancy Act (RTA) Emergency Declaration in the Australian Capital Territory could potentially result in investors ditching the local market, says an expert from the Real Estate Institute of the ACT (REIACT).

Michelle Tynan, CEO of REIACT, said while she supports the transitional period that will enable tenants to repay arrears during the Emergency Declaration period, concerns remain for the most vulnerable group who might not have the capacity to start repaying.

"The transition process now implemented by the government will require impacted tenants who are unable to maintain rent and arrears payment plans after the 22 October 2020 to appear before ACT Civil and Administrative Tribunal on two occasions, with eviction the only certainty under the amendments," she said.

Tynan said with this move, the government has failed to acknowledge that many landlords cannot afford to continue offering reduced or deferred rent indefinitely.

"For the past six months their costs have not reduced, yet government expects the goodwill of landlords to continue to be a viable option," she said.

The REIACT submitted a proposal to the ACT government in August, which outlined measures that will help both tenants and landlords. Under the proposal, the government will provide rental assistance to the most vulnerable tenancies in arrears. The proposal also ensures landlords would only have a mitigated loss of 25% of the total arrears.

"A condition of the landlord accepting this rent assistance payment would be that the tenant would stay in their home," Tynan said.

The group suggested that the rental assistance be funded from the $39m commitment for the Land Tax Credit Scheme.

Tynan said with the current measures being undertaken by the government, investors might start ditching the ACT.

"Our members have seen a sharp increase in the number of investors now leaving the ACT market. The uncertainty as to the end to the pandemic, coupled with increased outgoings, and legislated rent increases now limited to a stringent CPI calculation, has compelled many investors to list their properties for sale," she said.

This is concerning, given that ACT is the only market that experienced a decline in rent affordability in the latest report from the Real Estate Institute of Australia (REIA), Tynan said.

"The combination of this and the amendment announcement by ACT government will most certainly add further pressure to the already struggling community housing and welfare providers," she said.