The Queensland Government is considering proposals to limit rent increases to once a year as the rental crisis hitting the state continues.
Under the proposed bill, landlords would only be able to increase rents once a year and would be required to give tenants at least two months' notice before increasing rent. The bill also includes provisions to prevent landlords from excessively increasing rents or otherwise gouging prices.
Premier Annastacia Palaszczuk said the measures were aimed at balancing the rights and interests of Queenslanders who rent and property owners to ensure a healthy rental housing supply.
He also said reducing the frequency of increases from six to 12 months is consistent with most other jurisdictions across the country.
“There are more than one million Queenslanders who rent their homes and they all deserve fair treatment,” Premier Palaszczuk said.
“It's a fair way for them to pay the rent they can afford, and ensures they're not penalised for the rising cost of living Australians currently face. The Government will act immediately to limit the number of rent increases that can be passed on to tenants each year, limiting rent increases to just one per year.”
She said the vast majority of landlords are doing the right thing and looking after their tenants.
“We must and will act to implement reforms that balance the rights and interests of Queenslanders who rent and property owners in order to maintain a healthy rental supply.”
The proposal has drawn mixed reactions, with some praising the move and others concerned about the potential impact it could have on property owners.
Current Law
While details of the changes have yet to be announced, the REIQ has expressed concerns about how this will impact the real estate market and landlords across the state.
The REIQ said that under current law, rent increases under fixed-term leases are only valid if the rent increase is included as a special clause in the signed lease from the outset, specifying when the rent will increase and the amount of the increase, or how it will be calculated.
In addition to that, they said, a minimum of two months' written notice must be given and increases cannot commence more than six months after tenants have started paying their original (current) rent.
In the case of fixed-term tenancies, rent can be increased by giving the tenant at least two months' written notice, which can be given to the tenant at any time, but rent increases cannot commence until six months have passed since the current rent began to be paid, the REIQ said.
Legal Restrictions
Critics say the measure will have a minimal impact on tenants and landlords alike, given the current tight rental market, with tenants still facing rent increases that far outpace income growth.
Meanwhile, for real estate investors, rents are likely to continue to rise 12 months from now, just as they continued to rise during the various rental bans implemented in some states during the pandemic.
The current state of the rental market, particularly in major cities like Brisbane, has left many renters in a bind and while the proposed legislation may provide some relief in the short term, more needs to be done to address the underlying issues causing soaring rents, such as sharply increasing immigration levels and a lack of supply of rental properties.
There's more to come.