TODAY'S NEWS HEADLINES 2024
STAGE 2 RENTAL REFORMS ANNOUNCED
Written by Laura Valenti REIQ Board Director
Since the introduction of Stage 1 Rental Reforms in October 2022, which included changes surrounding pets, repair orders, ending tenancies, and minimum housing standards, we have been anticipating the announcement of Stage 2 Reforms.
This came on 4 Feb 2024, when the Queensland Government announced its intention to introduce a range of proposed rental reforms under a $160M ‘Renters Relief Package’.
Some of these proposed changes are simply enforcing best practice procedures already in place in our agency, about which our clients shouldn’t be overly concerned.
However, proposed changes surrounding such topics as rent increase frequency and property modifications could come as a surprise to property owners who are not fully informed.
It is important to keep in mind that current rental laws continue to apply until any proposed changes are progressed through the Queensland Parliament.
Please also note that without further detail, we don’t yet know how these laws will look on a practical level or how they will be administered.
As your managing agent, our top priority is to prepare for these changes and keep you informed along the way.
Summary of proposed Stage 2 rental reforms announced
Introduction of a rental bond roll-over scheme to allow bonds to be transferred between tenancies. A bridging bond loan product will be introduced by the Department of Housing while this scheme is established to assist eligible households to afford the upfront cost of a new bond, pending the release of their old bond.
Rent bidding and acceptance of higher rent offers will be banned and penalties enforced
Rent increase frequency will be tied to the property, instead of the tenancy
New framework for parties involved in a tenancy to agree on the installation of minor modifications
Entry notice requirement to change from 24 hours to 48 hours’ notice
Fee free options for tenants to pay rent
Prescribed timeframes for when tenants must receive utility bills for payment
Code of Conduct for the rental sector Standardised rental application form
Limiting break lease/reletting fees based off time left on tenancy agreement
New/improved rental grants and subsidies, and
Complied SAS Smoke
expansion of the Department’s RentConnect
Australia Alarm Services
frontline service officers
our clients reap the benefits of our team’s
Surrounds Electrical
Locksmiths
collective knowledge and experience.
Rental affordability goes from bad to worse, with more to come.
Data shows renters in each capital city are now worse off than before the COVID-19 pandemic 2019, and rental inflation is expected to increase further.
According to Sydney Morning Herald, Rental affordability has gone from bad to worse over the past year, deteriorating in nearly every capital city as the Reserve Bank warns rent inflation will remain high for some time.
The annual Rental Affordability Index from SGS Economics and peak body National Shelter found renters in each capital city were worse off than before the COVID-19 pandemic 2019.
The index, which compares rents to household incomes, shows previously affordable suburbs in cities from Melbourne to Brisbane would now strain the average household budget.
National Shelter chief executive Emma Greenhalgh said more households in the cities and regions were under rental stress, and many places were the most unaffordable they had ever been.
“Rental affordability in Australia is going from bad to worse,” she said.
“In the past year, renters have been smashed with enormous rent hikes well beyond income growth.
“With vacancy rates so incredibly low, landlords have been able to pass on interest rate rises to tenants - and the pressure is only set to increase following last week’s rate rise.”
Separate data from the Reserve Bank, which this month lifted interest rates to a 12-year high of 4.35%, noted advertised rents had increased by 30% since before the pandemic, well above rental inflation.
“Together with historically low vacancy rates and little sign that tight rental market conditions will ease in the near term, this is expected to keep rent inflation elevated for some time,” the RBA said in Friday’s statement on monetary policy.
Rental inflation neared 8% in the year to September and was expected to increase further, the RBA said.
A household is considered to be in housing stress once housing costs exceed 30% of its total income.
The Rental Affordability Index found Sydney had become the least affordable capital city alongside Hobart in the 12 months to June 30, as median rents rose by $100 to $650 a week, costing 29% of the average renter household’s income.
No coastal Sydney suburbs had acceptable rental affordability, it found, and inner-city locales were either unaffordable or extremely unaffordable. The average household needed to travel at least 15 kilometers from the CBD to suburbs such as Campsie, Lakemba, Rosehill or Parramatta to find acceptable rents.
SGS Economics & Planning principal Ellen Witte said this was a deep economic problem.
“Key workers in critical industries are traveling further and further and being priced out of their city,” she said. “We need a serious plan to provide the right housing at the right price to people who really need it.”
In Melbourne, rental affordability had dropped to 2018 levels, the report found. While an average rental property costs 24% of an average income, which is considered affordable, Witte said affordable pockets were disappearing.
“An entire corridor, stretching from Footscray in the inner west, north to Meadow Heights, was considered ‘affordable’ to the average rental household just last year,” she said.
“As of the June 2023 quarter, those options that cost less than 15% of a household’s gross income had all but vanished.”
