Victoria’s real estate industry has warned that some of the state government’s changes to property laws could actually raise rents, with landlords fighting against law changes to protect tenants, warning they could backfire.

The Real Estate Institute of Victoria has pushed back against law reviews designed to secure tenure for renters. It predicts the changes, intended to give certainty to the increasing number of long term tenants, could make landlords reconsider their investments. That in turn could put pressure on supply, raising rent.

Changes to the Residential Tenancies Act could allow renters to modify properties or sign leases of more than five years. It might also restrict rent rises to once a year and ban no-pet clauses.

The government review is in response to changes in rental demographics. Private rental was previously considered a short term transitional arrangement, which ended in home ownership, or a move to social housing.

But now one-third of renters is considered “long term”, having rented continuously for more than 10 years.

The review states that those long-term tenants are increasingly older people on fixed incomes, or families with children, for whom stability is important.

Investors could leave the market because they may have fewer rights than tenants, some have warned. Photo: Peter Braig

An options paper was released in January for public consultation but the REIV says it “lacks balance”.

“The majority of the proposals will undermine the key stakeholders, particularly landlords, but as landlords reconsider their investment and supply levels change, [it will have an effect] on tenants in Victoria,” the institute said in its response.

The institute consulted 3000 landlords in seven sessions last month, with deep concern expressed at the proposed significant shift in the landlord-tenant relationship.

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