Victorian rental crisis deepens as thousands of homes disappear

Tenants are among those bearing the brunt of thousands of landlords walking away from Victoria in the past year.

Victorian government policies and taxes have been blamed for a landlord exodus that state data released this week suggests could have wiped out almost 17,000 rental homes.

The latest Homes Victoria Rental Report, covering rental statistics to the end of March this year shows the state recorded a 2.5 per cent reduction in the Residential Tenancy Bonds Authority’s list of active bonds to 654,999 in the past 12 months.

It works out to a staggering 16,794 reduction in bonds, though the report also indicates not all tenancies have been collated — making it likely the reduction of rental properties will not be as severe as currently indicated.

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The report also revealed rents are getting more expensive, rising about $21 a week to $585 in the past year across Melbourne.

In regional Victoria the typical tenant who signed a lease since March 30 will be paying $27 more a week than they were a year ago.

The only glimmer of hope for renters was a marginal improvement in Melbourne’s vacancy rate, which has risen to 2.6 per cent from 2.2 per cent a year ago.

Real Estate Institute of Victoria acting chief executive Jacob Caine said an investor exodus was a product of state government-led regulatory changes, taxation increases and the “generalised disparagement of rental providers”.

REIV acting chief executive Jacob Caine said increasing numbers of people living in the one home was the only reason homelessness was not going “off the charts”.

“The reason it’s not absolutely catastrophic with homelessness off the charts, is that we are seeing household sizes increasing,” Mr Caine said.

“So we are now seeing two couples in a two-bedroom apartment; and where there used to be three people renting a three-bedroom house, now it’s up to six people.”

He added that for many landlords, increasing the rent was the only way to cope with extra costs imposed through government taxes and regulations that have been increased in the past few years.

Mr Caine said while there had been recent signs of rising interstate investor activity in Melbourne this year, “losing any properties out of the ecosystem at a time when the rental population is growing can only be regarded as a disaster”.

Tenants Victoria chief executive Jennifer Beveridge said rising rental costs were “concerning” at a time when renters had already faced significant increases.

Tenants Victoria chief executive Jennifer Beveridge said further rent rises were “concerning” given significant prior increases.

“Renters are looking to rental providers and the Victorian Government for some long overdue relief,” Ms Beveridge said.

“Too many are going without essentials like heating, kids’ supplies, or even groceries. The Victorian Government has got to do something to moderate rent increases and inject fairness into the system.”

She added that vacancy rates remained at “unhealthy lows” and there were fewer than 100 homes across Melbourne that a single parent on jobseeker could afford today.

Buyer’s agent and PIPA Victorian director Cate Bakos said interstate investors were one of the only groups looking likely to provide relief for tenants at this point.

Property Investment Professionals of Australia Victorian director Cate Bakos said the decline showed the government needed to review a number of its “ridiculous” policies, and change its negative language around investors.

However, Ms Bakos said she believed it was likely a surge in interstate investors, who now accounted for 70 per cent of her clients, could have slowed the attrition of rental property losses since March.

“A lot of them are saying they understand the land tax, but they see the value proposition outweighs the risk,” she said.

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