The Impact of Queensland’s New Tenancy Laws

October 14 2022

Rental reforms introduced in October have widespread implications for residential investors and tenants, and could worsen the Gold Coast’s rental crisis.
The Impact of Queensland’s New Tenancy Laws

New rental laws designed to improve the safety and security of tenants have widespread implications for residential landlords and may work to tighten already historic low vacancy rates on the Gold Coast.

Kollosche Managing Director Michael Kollosche believes the new laws will work against the very people they intend to protect by deterring new investors and driving existing landlords out of the residential rental market.

The statewide laws administered under Queensland’s Housing Legislation Amendment Act 2021 came into effect on October 1, with the main changes to affect landlords including:

· The inability to end a periodic tenancy without grounds;

· Limited ability to prohibit pets in a rental property;

· The introduction of repair orders; and

· Amended tenancy obligations including expanded grounds on which to end a tenancy.

A number of complicated caveats accompany the latest reforms, including those around selling a rental property, with hefty penalties for those who do not conform.

For example, if a landlord gives a tenant notice to leave on the grounds that they want to sell their property, they cannot re-let the asset for at least six months, even if the property fails to sell. Any landlord found giving misleading information around a tenancy notice faces a $6,892.50 fine.

Michael Kollosche | Kollosche

Mr Kollosche said the reforms heavily favoured tenants, provided no incentive to landlords and could end up proving too high a barrier for investors to continue in the rental market.

“It’s another example of government bodies pushing through laws without the appropriate levels of industry consultation,” Mr Kollosche said.

“Landlords not wanting to take on the extra risks will exit the market, further shrinking what is an already depleted rental pool, and driving existing rents higher.

“In effect, the tenancy reforms will work against the very demographic that they are meant to protect.”

According to CoreLogic, vacancy rates on the Gold Coast are at a historic low, with most suburbs sitting well below 1 per cent.

Data shows supply continues to be a major factor impacting the rental market, with the supply of advertised rental stock -35.4 per cent below the previous five-year average.

The number of investor-owned properties dropped significantly throughout 2020-2021 as landlords, unnerved by the impact of Covid and potential mortgage lending conditions, decided to take advantage of increased capital gains.

6 Beverly | Kollosche

Over the past six to 12 months, investors have slowly been trickling back into the market, attracted by increased rental returns and yields, but the new reforms could have a negative impact on this flow, and send investors looking for alternative opportunities.

“If investors again exit the market, it will push existing rents up even further and restrict the level of available housing, which will only serve to exacerbate the Gold Coast’s housing crisis,” Mr Kollosche said.

Kollosche Property Management has been working closely with our in-house legal counsel to support landlords and tenants to comprehend and comply with the changes.

If you have any questions around your obligations as a landlord or tenant, please reach out to our team for an informed conversation.

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