Speeches | August 23, 2018
Residential tenancies amendment bill 2018 - Second reading
Victorian Parliament - 23 August 2018 -Ms KEALY — I am very privileged to be able to speak on the Residential Tenancies Amendment Bill 2018. I had the portfolio of consumer affairs as shadow minister when this was first mooted a couple years ago. I know that even at that time there were deep concerns held by landlords who had contacted me at the time. There were deep concerns by real estate agents. Those inquiries were coming through thick and fast. The main cut and thrust of that is that they were concerned that if you look past the ideology of what is being said about what will be achieved through the changes to the Residential Tenancies Act 1997 — that there would be more protection for renters, that renters would have a safer environment and would therefore have this longer term ability to stay in the same home and have greater rights and responsibilities — you are actually in fact taking away a lot of those rights and responsibilities from the people who own these homes: the landlords. These are people of course who are not big fat cats and moguls. People who own a lot of the housing stock which is up for rent in the state of Victoria are actually people who are not doing that well. They are mum‑and‑dad investors. In fact one‑quarter of 25 to 39‑year‑olds own an investment property, and most rental property owners are on incomes below $150 000.
If you look at the economics of this, we are putting more pressure on landlords to pay more for minimum standards within a house. This is a great aspiration but we have got to look at the impact of it. The bill is looking for landlords to pick up some of those responsibilities — it is looking at landlords picking up the responsibility for any damage done by pets to their property and they are to take responsibility for any changes that renters may put in place through modifications. I know it is stated in the bill that these are minor modifications, but who is going to explain that to the renters? How are we going to have a really clear definition as to what is a minor modification and what is a substantial modification that may cause a lot of structural damage to the home and therefore put an additional cost on the landlord?
We have also got this four‑week bond cap. That would be okay, but we are also putting that in with the extra thing of minor modifications being allowed, which may have to be fixed. We are allowing all pets to come in without any questions asked. They can cause a lot of damage to the property, and of course can put some additional risk onto landlords. There are also allocations. And something the minister who just spoke referred to was the withdrawal of the 120‑day, no reason notice to vacate provision. There is also responsibility now within this bill for landlords to dispose of any abandoned goods and furniture. These are additional costs and additional risks that landlords will have to carry.
If they are taking on this additional risk — additional financial risk — then of course they are going to look at the value of their investment. They are going to look at whether they continue to rent their property or whether they sell their property or whether they look at other avenues that can return some revenue and pay off their interest on these homes. This is where it becomes a little bit complex, but it really is basic economics. I have already had local people — local real estate agents and local landlords — who have come to me and have already put a home which has been used as a rental property for many, many years on the market, therefore taking a property out of the rental housing pool.
I have also spoken to and heard from people in my own electorate who are now taking a property out of the rental market and instead are going to put it on Airbnb. On Airbnb they can rent their property out for one or two nights a week instead of having to be locked into a long‑term rental, and they see that as a way of reducing their risks but still being able to make the interest payments on their investment property. Of course those two outcomes — and they are very, very real; they are things I have heard from my own people — are the net effect of taking rental properties out of the market in western Victoria. I know this is something that is happening right across the state.
As we heard earlier from Labor, there are 1.25 million renters in Victoria. We already know that many of these renters are struggling with the rising cost of living. They are struggling with electricity prices going through the roof after Labor put such a huge brown coal tax on Hazelwood that it was forced to close down. We have also got increasing competition for affordable rentals, given that there is nearly a public housing crisis; it is nearly impossible to get any home in public housing at the moment. What Labor should be doing is not targeting this private rental sector, shifting this out and either causing these rental properties to be removed from the market or the alternative of landlords pushing up costs — pushing up the rent — and making housing less affordable. People who can least afford to save up for home deposits and people who can least afford to cope with an increase of even $10, $20 or $50 a week in their rent cannot afford it. It is going to push them out onto the streets. I am deeply concerned about this, as we are talking about the people who rely on our rental market.
There are of course people who love the rental market. I have been a renter for most of my life — it is only in the last couple of years that I have bought my first home — and some of that was due to the flexibility. I have worked all around Australia. I would move to where my job was. That was a much easier way for me to live rather than to make a commitment to buy a home and therefore be connected to that area for a longer period of time. It suited me, and I know that is something that a lot of other Victorians are looking at. They are looking at a permanent rental market to secure their own housing rather than purchasing a home. However, what we are going to see through this legislation is a net effect of fewer houses in the rental market and rental prices going up. Because of the cost of living increasing and the increase in competition for affordable housing, we are simply going to see more people who are unable to buy their first home or we are going to see more people end up on the streets.
It has been exceptionally disappointing that this government has refused to listen to the many, many people who have deep concerns about the impact of this legislation. I realise there is an ideology about trying to appeal to people who are renters, but these renters need to understand that living is going to get a lot more expensive for them if this bill comes into being. Certainly I think we need to see greater consultation from the government. It needs to listen and understand what impact this type of legislation would have on the availability of rental properties within the state of Victoria.
I would like to ask the government to undertake further consultation, which is why I support the reasoned amendment that was put forward by the member for Bayswater that further consultation takes place before this bill is considered. That is really to understand what the net impact will be for all affected stakeholders — for the landlords, for those lower end renters who will not be able to afford an increase in their rent from week to week and for people who are already struggling to make ends meet because it is so expensive to live in Victoria at the moment. Energy prices are going through the roof. Gas prices are going up and electricity prices are going up, and our salaries are basically stagnant, and this is something that could have a serious net negative effect on housing in Victoria.
I would like to thank local real estate agents and landlords who made the effort to provide their input to me. I was amazed to see the strong response arising from some of the Facebook posts put up by real estate agents in my area, not just from landlords but from renters as well. There are some serious concerns out there over what this is going to do to the rental market in Victoria. People are worried that if this legislation comes into place, they will not be able to afford to continue living in their home, that their house will turn into an Airbnb. This is going in completely the wrong direction if we are looking at housing stability. Rental properties today are being moved into the Airbnb market, which provides even less security for our renters. We need to look after the mum‑and‑dad investors. We need to make sure that everybody gets a fair deal, whether it is renters or landlords, and I ask that the government consider supporting the reasoned amendment so that further consultation can take place with those key stakeholders so that we can ensure that there is no net negative impact on rental properties and the rental market in Victoria.
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