In a move that could significantly reshape Victoria’s housing landscape, Premier Daniel Andrews has hinted at a major shakeup of housing policies. According to a senior government source, the proposed changes could include limiting landlords to one rent increase every two years, up from the current 12-month period, and potentially stipulating a maximum percentage for rent increases.
Speaking to journalists on 23 July, Andrews stated that “everything is on the table” with regard to the housing measures the state was considering. “There’s a very long list of different policy approaches, different things we can do. We are shortening that list down … we’ll have more to say in a couple of months’ time,” he added.
The policy amendments are also expected to include a tax on hotel stays and short-term rental accommodation (STRA), such as those booked on Airbnb and Stayz, of roughly $5 per booking. Andrews promised that the forthcoming announcements would represent one of the biggest shake-ups in terms of delivering more housing and more housing choices and options than the state has seen.
However, the Premier also noted that the government would not seek to accomplish everything in one fell swoop. “It won’t be everything, there’s always more to be done,” he said, stressing that Victorians have been impressing on him the need to take action on housing supply.
Real Estate Institute of Victoria CEO, Quentin Kilian, responded to the suggestion of forthcoming rent caps by warning that such a policy could deter investment activity and worsen circumstances for renters by depleting rental stock. He characterised these rumoured proposals as “a knee jerk reaction that smacks of political opportunism”.
Kilian argued that 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. He warned that they are very likely to take their hard-earned savings elsewhere, leading to much less rental stock available, much higher prices, and more homelessness.
On the other hand, those in the STRA industry appear open to the proposals that might be levied against their industry. Airbnb’s head of public policy in Australia and New Zealand, Michael Crosby, has said the company supports the introduction of a tax on short-term rentals, as it would enable short-term rental revenue to contribute to community needs.