10 points to examine for Victoria’s rental crisis

 

Distressing for everyone

 

There are most likely more than 10 points to examine for Victoria’s rental crisis but this is what agents are seeing. Victoria’s rental crisis has been a significant issue, with various factors contributing to its severity. Some argue that policies implemented by the government, including those led by Premier Dan Andrews, have exacerbated the situation.

 

The changes made to rental laws before increasing supply were short-sighted and ironically worsened the impact on the rental supply. These sensationalist policies impacted renters, landlords, investors and the public without fixing anything – indeed it has made finding accommodation harder!

 

As an agent, I am constantly asked about rental accommodation and now more often than not, I cannot help, which is very distressing. We have landlords who are extremely nervous about getting good tenants because of law changes that have instilled fear and tenants who are competing for housing that is too expensive.

 

Policy devoid of strategy

 

It is essential to analyse specific policies and their effects to understand how they have contributed to the rental crisis in Victoria. During Covid the rental market collapsed as people could no longer afford rent while out of work. As we emerged from that period Australia’s increased immigration and rental demand became strained.

 

The shortage of housing meant more buildings were needed. However, the supply of building materials was recovering with shortages, delays and increased costs. The interruption to the building meant there were more people needing accommodation than there were properties.

 

The shortage of physical properties is the main problem – not greedy landlords. The government also quickly attacked Airbnb accommodation citing investors deprived long-term tenants of accommodation. That is partly valid and was rightfully addressed. However, there was no examination of all the categories of properties offered through Airbnb. Small cabins near beaches and the country and much-needed cheap transient accommodation were tarred with the greedy landlord brush.

 

As is common with government and the media they both look for scapegoats or reliable income streams. Blaming greedy landlords or real estate agents is better than dealing with their appalling failures. This diversion approach elevates these estates and demonises industries like real estate ensuring the guilty are seen as less culpable. All governments and media outlets do this and there are very few ways for the scapegoat industries to highlight this pervasive tactic.

 

What needs addressing

 

  • The rapid population growth in Victoria in recent years has been driven by factors such as migration and natural population increase. This population growth has impacted the housing market by increasing demand for rental properties.

 

  • The limited supply of affordable housing in Victoria, particularly in major cities like Melbourne. This scarcity of affordable options has resulted in higher rents and increased competition among renters. Addressing broader economic and social factors influencing housing affordability also needs addressing.

 

  • The changes to rental laws under Dan Andrews’ leadership, has introduced changes that supposedly were aimed at improving tenant rights and protections. While these changes are beneficial for renters, they have had unintended consequences such as landlords becoming more cautious about renting out properties, leading to reduced supply and higher rents.

 

  • The property investment dynamics in Victoria like many other parts of Australia, is influenced by speculation and investor behaviour. These dynamics can contribute to fluctuations in rental prices and housing affordability. Housing in Australia is considered as much an investment as it is shelter and that is now a problem.

 

  • The COVID-19 pandemic also had an impact on the rental market, with factors such as temporary bans on evictions and financial hardships for both landlords and tenants affecting the dynamics of the rental sector.

 

  • Scams have also proliferated as Covid-19 created a reliance on online transacting. People became comfortable with buying, selling and renting ‘unseen’ transacting. People need extra protection when releasing their details. The most impacted are arguably renters as more and more information is being asked for.

 

  • Affordability remains a significant challenge for many renters in Victoria, particularly low and middle-income earners. High rental prices relative to income can result in financial stress, housing instability, and potential homelessness for vulnerable individuals and families.

 

  • More collaboration between government, industry stakeholders, community organizations, and advocacy groups to address the rental crisis. Working together, these stakeholders can develop comprehensive strategies considering the diverse needs of renters, landlords, and the broader community.

 

  • Long-term planning is essential to address the underlying structural issues contributing to the rental crisis. This includes investment in infrastructure, urban planning strategies, housing affordability initiatives, and policies that promote a balanced and sustainable rental market.

 

  • The way property is discussed in the media. Sensationalist ‘us and them’ real estate stories breed mistrust. Simply providing information on important life-affecting issues rather than exploiting the topic for gain would be great – but that will not happen.

 

Quick fixes and blame are never a solution to a central problem but they are diversionary. The rental crisis is well beyond bricks and mortar, where you live is a primary need and affects people’s psyche. Rather than point fingers we should all respect the roles stakeholders have and draw on their strengths for solutions.