Melbourne’s rental vacancy rate dipped to 4 per cent in June, which was 0.7 per cent lower than the figure recorded in May, according to REIV Residential Rental data. With the rental crisis worsening, conversations are now swirling around the real estate industry as to how we got in this position.
A recent article published by the Herald Sun explores how the new laws protecting renters could be contributing to the state’s rental crisis. While a number of factors are contributing to the tightening of the market, the changes made to the Residential Tenancies Act early last year have undoubtably played a part.
The new laws under the Residential Tenancies Act intend to look after renters and provide them with greater control over their lease. While it is positive and important to look after renters, the knock-on effects of these laws were completely neglected and are now coming to the surface.
Philip Webb Real Estate has witnessed rental providers exiting the market for at least 12 months who were unable to meet the demands of the new laws. In the last financial year, 100 more properties were sold from our rent roll than in previous years – a massive 60 per cent increase.
So, is there a solution to the problem?
There is no immediate solution. But what we will see is investors return to the market in the next two, three and four years. With rental prices on the incline, greater rental returns will draw investors back to the market, increasing the number of available rentals and appeasing demand.
If you need advice or guidance as a rental provider or renter in the current market, please reach out and give our office a ring today.