‘Everything is on the table’ as Victoria promises housing policy shake-up

Victorian Premier Dan Andrews has indicated that a forthcoming raft of policy measures could include limits on rent rises.

Victoria Melbourne houses aerial spi bzwbos

The Age first reported that a senior government source, speaking anonymously, disclosed that discussions have involved a proposal to limit landlords to one rent increase every two years, up from 12 months. The measures may also stipulate a maximum percentage that rent can be raised.

Speaking to journalists on Sunday, 23 July, Mr Andrews said 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,” Mr Andrews 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.


Mr Andrews promised: “When it’s all announced and detailed, it will represent one of the biggest shake-ups in terms of delivering more housing and more housing choices and options than our state has seen.”

Though the state premier also flagged that this government would not seek to accomplish everything they felt needed to be done in one fell swoop.

“It won’t be everything, there’s always more to be done,” Mr Andrews noted, stressing that Victorians have been impressing on him the need to take action on housing supply.

“As I move around the community, I think there’s nothing more important than getting more supply into our housing market, because with more supply, renters, those who want to buy, their parents, families, everybody who’s concerned about housing, will have more options,” he said.

Real Estate Institute of Victoria CEO, Quentin Kilian, responded to the suggestion of forthcoming rent caps by warning that, in his view, such a policy would deter investment activity and therefore worsen circumstances for renters by depleting rental stock.

“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,” Mr Kilian said.

He characterised these rumoured proposals as “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?” the REIV CEO queried.

Were these potential reforms to become law, Mr Kilian said he believed they would result in “a 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,” he said.

Those in the STRA industry, however, are reportedly 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 empower short-term rental revenue to contribute to community needs.

Airbnb is committed to working with state and territory governments to enable local councils to establish a tourism levy applied to all accommodation providers,” he told SBS earlier this year.

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