Thursday 19 Nov 2009
Residential investors will be forced out of the state’s residential rental market if proposed changes to the Residential Tenancies Act are introduced, according to the REINSW.
And in a ‘perfect storm’ scenario, tenants won’t escape unscathed with rents predicted to skyrocket and available properties to dwindle as existing investors leave the market without being replaced by new investors.
“What is proposed will deliver carnage to Mum and Dad investors and tenants across NSW”, said REINSW President, Steve Martin.
“Put simply, these changes are nothing short of investment vandalism and will leave NSW a wasteland as investors flee to other states.
“REINSW predicts the cumulative cost impact of the proposed amendments could easily exceed $5000 per residential tenancy in the first year of the new Act as a direct result of new conditions imposed on landlords.
“These price increases will have a devastating impact on Mum and Dad investors who will simply drop out of the residential tenancy market and look elsewhere to invest, most likely outside NSW.
“For those that do stay in the market, these costs will be passed directly onto tenants.
“On an average rental of $500 per week, these new costs could be as high as $100 per week which is a 20% increase.
“For struggling families in rental accommodation, this could push them beyond their financial means.
“I don’t understand why the government is targeting tenants like this.
“What we will see as a direct result of these amendments will be fewer rental properties because there are fewer investors; and this will push rental prices even higher.
“If the government wanted to drive investment away then it couldn’t have done a better job.
“Other key problems with this draft legislation include:
- The introduction of “rent control” under new tenancy agreements
- Allowing poor performing tenants to not pay rent until served notice by the Sheriff at the 11th hour
- Ability for tenants to terminate leases ‘at will’
- The unfettered right of tenants to modify premises as they choose
- The disincentive to offer long term leases
“Unfortunately tenants are the ones that will pay the highest price, at least those lucky enough to find a rental property.
“REINSW is lodging a formal submission opposing the changes on behalf of both tenants and landlords.
“I urge all those affected to urgently contact the Minister’s office to voice their objection to these changes before it is too late”, said Mr. Martin.