Land tax threat blow to rentals
LAND tax threats and new laws have led to an exodus of landlords from the Gold Coast market, leaving a shrinking pool of rental properties and a growing list of tenants with nowhere to go.
Industry figures warn major changes affecting landlords under Qld housing law reforms introduced this month were another blow to rental supply, landing just days after the government scrapped its controversial land tax scheme.
The number of investorowned properties dropped significantly through 2020-2021 as landlords sold up, unnerved by the impact of Covid and potential mortgage lending conditions.
More exited in recent months as details emerged of Qld’s proposal to consider investors’ interstate holdings when calculating land tax – the scheme was axed last month.
Kollosche principal Michael Kollosche said investors were slowly trickling back into the market, attracted by soaring rents and strong yields, but the new reforms could again stymie confidence.
“This would restrict the level of available housing and lead to higher rents, essentially exacerbating the Gold Coast housing crisis.”
Major changes under Queensland’s Housing Legislation Amendment Act 2021 introduced on October 1 include:
The inability to end a periodic tenancy without grounds;
Limited ability to prohibit pets in a rental property;
The introduction of repair orders;
Amended tenancy obligations including expanded grounds on which to end a tenancy.
Mr Kollosche said the reforms, while intended to protect tenants, had widespread implications for mum-and-dad investors as well as renters.
LJ Hooker Property Hub property manager Jessica Melling said the greatest demand was for rental properties priced below $800 a week.
Both houses and units in this range were snapped up within a week of listing, with an average of 30 to 50 people attending an inspection.
“When people have been in a property where the rent hasn’t increased in years and then the owner sells that home, then having to go to market is quite a big shock when on their same income,” she said.
“They are now having to pay anywhere from $100 to $250 more to afford the same home. You just don’t make that extra money overnight.”
Mr Kollosche said the laws heavily favoured tenants, provided no incentive to landlords and could end up proving too high a barrier for investors to hold their assets.
The reforms also introduced hefty penalties for investors not complying with new rules around selling their rental properties.
For example, if a landlord gives a tenant notice on the grounds that they want to sell their asset property, they cannot re-let the property for at least six months, even if the property fails to sell.
Property analyst and buyer’s agent Simon Pressley said the state government’s “poor policies” had gouged rental supply by failing to support investors.
“When those who stump up their own hard-earned money to supply rental accommodation are treated like s--t year after year, no one should be surprised that there is not enough supply,” Mr Pressley said.
“That’s why rents are soaring. That’s why former good tenants are now sleeping in cars.
“Frankly, the actions of the state government over the last five or so years have played a significant role in forcing Queenslanders out of rental accommodation and pushing rents up so much.”