Property Investors Crucial

These comments are the writer’s own and do not necessarily reflect the current opinions and policies of the Real Estate Institute of Western Australia.

Earlier this week, the Northern Territory government passed legislation that changed their tenancy laws enabling tenants to keep pets at rental properties without seeking the owners’ consent. This was done despite a parliamentary committee recommending that such provisions not be introduced.

This trend towards taking away the rights of property owners across the country is worrying, not for landlords but for tenants.

How can that be I hear you ask? Well, any unreasonable laws that disincentivise people from investing in residential property for rental purposes leads to a shortening of supply, which inevitably leads to higher rents. 

When federal Labor sought to make dramatic changes to negative gearing and Capital Gains Tax provisions last election, the real estate industry fought against it. Bill Shorten dismissed our concerns as predicated upon self-interest. The reality is the opposite. Agents who manage property for landlords, benefit from increased rents because their management fees are calculated as a percentage of the rent received.

Last year, CHOICE, National Shelter and The National Association of Tenant Organisations jointly released a report that considered the consumers’ experience of renting property in Australia. One of the report’s key claims was that more than half of all tenanted properties needed repairs to them and that most tenants felt insecure and were required to move from tenancies more often than they’d have liked.

The report was an exercise in “landlord bashing”, an increasingly popular pursuit from some sectors that consider personal aspiration and wealth building as some sort of unjustifiable evil. 

Obviously, it’s important to ensure all tenants are protected by laws that ensure they are entitled to the quiet enjoyment of their home, that essential maintenance and repairs are done well and quickly and that those landlords that break those laws are held to account. Currently, the Residential Tenancy laws in Western Australia work well; they are reasonably well balanced and generally favour tenants.

The disturbing push from certain groups to further swing the balance towards favouring tenants inevitably discourages property investment. Is this the outcome the writers of the report are after predicated upon some sort of ideological pursuit? Limiting property investment always – yes always – delivers higher rents and less choice to tenants so what is it they hope to gain? 

One major finding around tenants’ feelings of insecurity around the short term nature of residential tenancies is, frankly, down to the tenants themselves yet somehow this has been “blamed” on the landlords. There are no laws preventing a tenant seeking a longer-term lease. 

Privately owned investment properties provide millions of Australians essential and affordable (in WA renting is way more affordable than home ownership) housing. Without those investors, governments will need to provide those homes and in WA our government already has 14,000 people waiting for them to be built.

by Hayden Groves
REIA Deputy President

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