DAMAGE OF RENTAL MORATORIUMS
Thursday, 17 September 2020
Mr NEWBURY (Brighton):
My Adjournment is to the Treasurer and the action I seek is for the Treasurer to outline to landlords, property investors and the real estate industry in my community what support is available to them following the State Government’s extension of rental protections through the COVID-19 Commercial and Residential Tenancies Legislation Amendment (Extension) Bill 2020, which many believe is imbalanced and has swung the pendulum too far one way.
The Government’s intervention into the residential and commercial tenancy market is unprecedented—unprecedented in the way that the government has overridden private agreements that have been mutually agreed to. Six months ago, there was understandable rationale for intervention to prevent immediate wholesale homelessness. With six months passing, and the enabling of a further six-month extension to the measures, it is incumbent on the government to rebalance both property owners’ and the tenants’ interests, or provide enhanced support.
The Real Estate Institute of Victoria slammed the Government’s announcement of a six-month extension and criticised the lack of genuine consultation. The institute revealed that the initial ‘consultation’ they were invited to amounted to a roundtable with over 35 industries. What a stitch-up. What a farce. As the institute has said, ‘landlords have virtually no relief while tenants get substantial support’.
In an unprecedent way, the Institute has advised its members ‘to refuse to negotiate rent reductions, forcing every request into the dispute system, a system that has already failed to cope with the caseload … With a backlog of over 4,000 cases VCAT is not equipped to resolve disputes’. Effectively, because of the unfairness in the government’s approach, the industry peak body is promoting system collapse. It is unprecedented.
There are so many people in every community across the state who are affected by this policy. Those people rely on the income they receive from owning property, including for many where rent is their sole income. There are thousands of Victorians who have worked hard and invested to build themselves a better life. They have been the hardest hit by this Government.
Hundreds of constituents have contacted me about the devastation this policy is causing to their lives and livelihoods.
As Sylvia wrote to me, ‘We do not dispute that many tenants are facing difficult times, what concerns us is the apathy towards landlords and home owners. When a tenant doesn’t pay their rent, or pays much less than the contracted amount, this impacts our ability to pay our mortgage, property rates and charges, owners corporation fees, insurance premiums, property repairs and maintenance, property taxes and more. None of these expenses go away when a tenant stops paying the market rent’.
These people have been forgotten by Labor—their cries for help have been wilfully ignored by the State Labor Government and the Premier.
As Howard shared with me, ‘There is growing evidence that residential landlords are being left behind and all but forgotten … The decision to extend the rental moratorium to 28 March 2021 without attention to the impact this has on landlords, reflects a short-sighted and unbalanced approach. While the Andrews’ government is keen to support tenants, protecting investments of property owners seems to be of much lower priority. We do not dispute that many tenants are doing it hard, what concerns us is the apathy towards the impact that has on the property owner’.
And as Russel wrote to me, ‘I am still incurring Body Corporate fees, Council rates, water rates etc. with no cash inflow. I am now finding this a real financial burden’.
The pain is also being felt by commercial property investors. As Scott wrote to me, ‘There were approximately 700 properties for lease in the Melbourne CBD back in February this year and as per realestate.com.au, there are currently 4004 properties for lease … this has impacted dramatically on rental values where we have seen on average a reduction of circa 20 per cent across the board’.
Whilst all of the residents who have raised this issue have expressed their profound understanding of the hardships tenants are facing, they are outraged by the state government’s blatant dismissal of the hardships faced by landlords, who are now carrying a backbreaking burden.
The damage this policy is causing is real. It is backbreaking. And it is no longer justifiable without additional support.