The Queensland State Government is considering a proposal to limit rental increases to once a year amidst the ongoing rental crisis that is gripping the state.
Under the proposed legislation, landlords would only be able to increase rent once a year, and they would be required to give tenants at least two months' notice before increasing the rent. The legislation also includes provisions to prevent landlords from increasing rent excessively or engaging in other forms of price gouging.
Premier Annastacia Palaszczuk said the move is designed to balance the rights and interests of Queenslanders who rent and property owners, to sustain a healthy rental supply.
Reducing the frequency of increases from six months to 12 months is also consistent with most other jurisdictions throughout the country, she said.
“There are more than a million Queenslanders who rent their homes, and every single one of them must be given a fair go,” Premier Palaszczuk said.
“A fair go to pay rent they can afford and not be penalized for the cost of living situation all Australians find themselves in today. Our government will act immediately to place a limit on the number of rent increases that can be imposed on tenants each year. We will limit annual rent increases to just one.”
She said the great majority of landlords do the right thing and look after their tenants.
“We must act and will act to deliver reforms that balance the rights and interests of Queenslanders who rent and property owners to sustain a healthy rental supply.”
The proposal has been met with mixed reactions, with some applauding the move, and others concerned about its potential impact on property owners.
While the specifics of the changes are yet to be released, REIQ has voiced its concerns about what impact this might have on property markets and landlords across the state.
REIQ said that under the current laws, a rent increase under a fixed-term tenancy agreement is only valid if the rent increase was included as a special term of the signed tenancy agreement from the very beginning, stating when the rent would increase and the amount of the increase or how this is to be worked out.
They said that on top of that, a minimum of two months written notice is required, and the increase doesn’t commence sooner than six months after the tenant started paying the initial (current) rent amount.
While under a periodic tenancy, the rent can be increased with a minimum of two months’ written notice, which could be given to the tenant at any time, but the rent increase cannot commence sooner than six months after they started paying the current rent amount, REIQ said.
Given the current tight state of the rental market, critics have said that the measure will have minimal impact on either tenants or landlords. The tenants are still facing rent increases that are far outpacing their income growth.
While for property investors, they are still likely to continue to push rents up after 12 months. In the same fashion that rents continued to rise during the various rental moratoriums that were in place during COVID in some states.
The current state of the rental market, particularly in major cities like Brisbane, is pushing many renters to the brink and while the proposed legislation may offer some relief for a short period of time, more needs to be done to address the underlying issues driving up rental prices such as the extreme increase in immigration levels and a lack of supply of rental properties.
More to come.