Media Statement from the CEO

Real Estate Institute of Victoria CEO, Quentin Kilian, has provided the following statement this morning as the Victorian Government has indicated, via a media release, that it is considering both restricting the range of a rental increase and banning a rental provider from applying a rent increase any more than once every two years.

“This decision to cap rents, if they proceed with it, will cause untold damage to an already fragile rental market in Victoria – already under duress from land tax increases, interest rates rises and increasing regulation.”

“What is needed is a measured approach, in consultation with industry, to incentivise sustained supply, not a knee jerk reaction that smacks of political opportunism.”

“In any supply chain, and the rental market is an essential supply chain, how can you dictate to a supplier that they cannot increase their costs under any circumstances but at the same time you continue to increase costs to the supplier?”

“Yet, our political leaders seem to think this is a good idea to implement. The result will be an increased and sizeable departure of rental providers, leading to much less rental stock available, much higher prices and more homelessness.”

“If rent is capped and cannot move with the market, investors are unable to respond to cost movements such as increasing interest rates, maintenance etc. They are very likely to take their hard-earned savings elsewhere, which is what we are already seeing as a response to the increases in Land Tax.”

The REIV has made a submission to the Inquiry into the rental and housing affordability crisis in Victoria, the government should consider the suggestions made before jumping at short sighted tactics.

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