The State has a rental crisis and part of the solution is to stop punishing landlords and driving them from the Victorian market.
Our State Government is contributing to this with policy that is either pushing landlords interstate, or from the market altogether, meaning less rental properties available and higher prices for home seekers.
As a result, more are adding their names to the public housing waiting list which has exploded to around 60,000 state-wide in the last two years.
Eighty per cent of renters are in the private sector, so declaring war on private sector landlords in Victoria makes no sense and impacts renters.
The Andrews’ Labor Government seems to think all landlords are rich and can afford the increased charges it is imposing on them. It also seems to think they will not look at other investment options - it is not the case on either count.
Certainly, some are wealthy, but data shows the majority have one investment property and are Mum / Dad middle income earners. They have simply chosen property investment over alternatives like the stock market or fixed interest.
The top 40 occupations of people who own rentals include workers in childcare, the disability sector, aged care, motor mechanics, truck drivers, receptionists, sales assistants, school teachers, nurses and police officers.
A raft of new taxes and regulations are hitting these Mum and Dad investors hard, meaning they are either selling, or moving their investment interstate. In short, largely because of government, Victorian landlords are in decline.
If they do hold on, they are passing the additional costs on to tenants, making properties less affordable.
In 2021, new State rental minimum standards came in which, while reasonable, had a timeframe that saw owners of rental properties sell up rather than spend the $10-15k that was in some cases required to meet these new benchmarks.
Some rallied against losing the right of veto on tenants to have pets or have minor alterations made to properties like shelves installed on walls.
Relatively minor annoyances, but these changes and extra regulation were a tipping point and made some sell up and look at other investment options.
But, it’s about to get worse.
From January 1, the tax-free threshold for land tax rates will reduce from $300k to $50k for the next 10 years, hitting more rental property owners, mainly rural.
In addition, there will also be an extra fixed annual charge imposed, starting at $500 for landholdings that are valued from $50k to $100k and rising to $3,675 per annum at the top end of the market.
Talk to any real estate agent and they will tell you landlords are seriously considering their future and when they leave – as they are – it further increases the gap between rental demand and supply.
Wouldn’t it make more sense to say to Mum and Dad investment property owners – if you commit to the rental market for 5-10 years, you will be exempted from these charges? Incentivise them, not punish them.
To give an example of the impact of things like the land tax money grab by Andrews, it was reported last week by CEO of Stockdale and Lego, a major realtor said, “when the land tax change was announced, all our offices across Victoria received calls from landlords saying they wanted out”.
That article also quoted one landlord selling up and moving her property investment to Queensland, and another selling up and investing in the stock market. It is becoming more common.
The number of rental properties being built has dropped to the lowest in 10 years and as others leave for different options, the gap grows.
Add into the mix that the Federal Government has just announced the highest number of foreign students will come into Australia in a decade, with over half a million visas granted.
A new report by the Institute of Public Affairs found international students took up 70 per cent of new housing units in the last financial year and the flood of students coming will further increase pressure on the housing market.
While we will likely not see a major direct impact locally, it creates a ripple effect. Many for the first time are now debating the benefits of international education against the negative impacts on young Australians finding housing.
The Albanese Federal Government has said it plans to provide residential housing tax breaks for landlords, but the detail is yet to be seen. Let’s hope it is significant, however, it does not solve our state problem.
The reality is, we’ve had a series of recent policies and taxes that have pushed middle income landlords from the marketplace, and we are seeing the results.
Now we have the Greens advocating for a rent freeze. Could you think of a better policy to drive more Mum and Dad landlords from the sector in a period of increased charges and interest rates?
First National Real Estate chief executive, Ray Ellis, said he feared such a move would result in a 30 per cent reduction in rental supply – “at a minimum”
Much of the answer sits with easing the administrative and cost burden on landlords - renters will be the beneficiaries through more rental properties.
If you bring up the housing shortage, the State Government is quick to point to its Big Housing Build, a program to build 12,000 new public housing residences.
Problem is, it held a small celebration last year to congratulate itself on reaching the halfway point, which you would think would be 6,000 additional new homes.
However, the Department’s annual report showed we’ve had a net increase of 74 homes – they are selling off old properties almost as rapidly as they are building new ones. The data shows in recent years areas of East Gippsland and Wellington have had a decline in public housing.
The government refutes this figure of 74 from its own reports, but the reality no-one can argue is, we are not having anywhere near the net gain of 12,000 public housing homes promised.
The government should have announced this as a public housing renewal program (which is what it is), not additional public housing as it tried to sell it.
Last week’s announcement to scrap the Commonwealth Games brought a promise of “1,300 new social housing homes” – it will be interesting to see what the net gain is, if any. Again, it all depends how many are sold off while building the new homes.
The State Government needs to start stating how many “additional” homes we will have, rather than “new”, as the latter is misleading.
Building more public housing is certainly a big part of the answer to our housing availability issues, but it’s certainly not the whole answer.
Halting the war on our middle-income landlords and providing a framework that encourages people into property investment rather than push them into other investment options as we are doing, is a bigger piece of the solution.

31 July 2023