Melbourne might be Australia’s most affordable city to rent a house, with a median rent of $520 per week during the June quarter, according to Domain’s house price report.

But nonetheless, the state government recently indicated it’s considering rent controls as part of a new housing package. The rent controls include:

  • Restricting rent increases to once every two years (up from the current 12 months)
  • Implementing a cap on rental increases

The housing package is also expected to include additional taxes on owners of Airbnbs and vacant properties.

Premier Daniel Andrews told The Sunday Age that ‘everything is on the table’ when it comes to giving tenants greater protections.

“Too many Victorians are under rental stress and too many are having to go and live a long way away from where they work. It doesn’t make sense to keep on building suburb after suburb. We need to create more housing with the best design standards where people want to live,” he said.

REIV: capping rents to cause “untold damage”

The Real Estate Institute of Victoria (REIV) chief executive Quentin Kilian said the decision to cap rents, if it goes ahead, would cause “untold damage” to the rental market in Victoria.

“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,” he said.

“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?

“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.”

Freya Southwell is a property lawyer and principal of Sutton Laurence King Lawyers.

Need expert advice on property law in Victoria? Contact Sutton Laurence King Lawyers today on 03 9070 9810 or  for help.