In an article released by the REIV on July 2nd, 2024, the Victorian Government's initiative to enhance energy efficiency in rental properties was applauded but the were also cautioned against hasty implementation.
On behalf of its 7,000 members, the REIV presented a detailed submission to the Victorian Government’s consultation process. The submission emphasized the volatile nature of the current rental market and the challenges rental providers face in meeting the proposed new minimum energy efficiency standards.
The REIV’s submission highlighted five crucial recommendations, designed to assist the Victorian Government in achieving its sustainability goals, while mitigating any adverse impact on the rental market.
1. Financial Assistance for Rental Providers
The REIV stressed the need for financial support, acknowledging the significant costs rental providers will incur in meeting the new standards. The association suggested introducing financial assistance measures, such as land tax rebates, to help property owners manage the costs. Without such measures, the additional financial burden could lead to more rental providers exiting the market, making it even harder for renters to secure affordable homes.
2. Extended Timeframes and Transitional Periods
Considering the high costs involved and the ongoing shortage of qualified tradespeople, the REIV recommended a 36-month lead time for full compliance with the new standards. The association also urged the government to allow for transitional periods and to prioritize certain standards over others, based on their impact.
3. Compliance Training for All Stakeholders
The REIV called for structural reforms to ensure clear and consistent application of the new standards. They recommended introducing thorough compliance training and documentation for all stakeholders, including rental providers and tradespeople. By ensuring that all parties are well-prepared, the REIV believes the government can prevent non-compliance issues from worsening.
4. Clearer Details Regarding Exemptions
Another critical area the REIV addressed is the need for clarity around exemptions. The association is seeking more specific guidelines on which properties will qualify for exemptions and under what circumstances, to prevent the misuse of loopholes and ensure a fair playing field.
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5. Education for the Sector
To further support the transition, the REIV suggested that the Victorian Government work with Consumer Affairs Victoria to implement a comprehensive education campaign. This would ensure that both rental providers and renters fully understand their obligations under the new energy efficiency standards.
A Balanced Approach is Needed
While the REIV strongly supports the aim of improving the energy efficiency and safety standards of Victorian rental properties, they remain resolute in their belief that the government must carefully consider the flow-on effects of such significant compliance requirements. Without financial incentives and longer lead times, the introduction of these standards could unintentionally destabilize the rental market, making it more difficult for renters to find affordable housing in an already tight local market.
The REIV's recommendations offer a balanced approach that prioritizes sustainability while safeguarding the interests of private investors and renters alike.
If you would like further information on the contents of this article of have concerns about what this might mean for you as an investment property owner, pleae contact the experienced and professional property management team at First National Real Estate Neilson Partners.
