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The government’s energy efficiency mandates could alienate “the backbone of the rental market”, the institute warned.
As the Victorian government prepares to launch minimum energy efficiency standards for rental properties, the Real Estate Institute of Victoria (REIV) has called for some key amendments to the proposed legislation.
While the institute stated it “welcomes” the Allan government’s intent to improve energy efficiency, it advised that longer time frames and financial incentives for landlords will be necessary to ensure a smooth delivery of the plan.
“Private investors remain the backbone of the rental market, and any legislation that triggers additional costs must consider their financial capacity to meet the new standards,” said REIV president Jacob Caine.
“In principle, this is a positive move that will provide renters with more comfortable homes that are cheaper to run. However, these requirements must be implemented without further exacerbating the immense pressure our rental ecosystem is already under.”
In its submission to the state government, the REIV identified five recommendations:
1. Financial assistance for rental providers
Noting that the standards would come with considerable costs for property owners, the REIV recommended the government offer financial assistance to rental providers, such as land tax rebates, warning that further financial strain could risk forcing rental providers out of the market.
2. Longer time frames and transitional periods
The REIV proposed a 36-month transitional period for full implementation and compliance, citing tradespeople shortages as a barrier for prompt implementation of the plan.
3. Compliance training
The institute recommended that the government implement comprehensive compliance training to all stakeholders, in order to “avoid exacerbating current issues around non-compliance”.
4. Clearer details about exemptions
The REIV requested a clear, unambiguous definition of who would be exempt from the new rental standards in order to limit opportunities for people to exploit loopholes.
5. Education
Renters, landlords, and agencies must receive “significant education about new standards” to ensure all stakeholders are aware of their obligations.
The REIV stated that implementing these amendments could help ensure that the new energy efficiency mandates live up to their promise.
“We are concerned that rushing to implement these new standards without a strategic plan and clear, unambiguous guidelines might, in practice, lead to delays or outcomes contrary to the intent of the legislation,” said Caine.
Consultations with community and industry are still underway for the proposed legislation, with the government’s final regulations set to be announced in October 2024.
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