The latest state government changes to renters' rights is another nail in the coffin for property investors believes KR Peters Director Peter Nicolls.
The government announced six changes to be phased in over the next 12 months.
* Rental providers will have to show receipts and evidence before bonds can withheld for damage.
* No fault evictions for fixed-term agreements will be banned
* Extra fees will be banned when rent is paid including on third-party 'rent tech' apps
* Apps will be banned from charging background check fees for rental applications
* Costs associated with breaking a lease will be capped to four weeks rent
* Rental providers will have to supply a spare key or fob when requested to do so
Mr Nicolls said the latest changes will exacerbate the burden already weighing heavily on Victorian property investors.
"The government has made it very onerous for rental providers. They are wounded and they feel that the system is completely out of whack," he said.
"Although there is nothing too onerous in this latest package of changes, you add them to
everything else and rental providers feel like the power has swayed too far towards the renter.
"Investment properties are becoming too hard to manage and too expensive to keep."
The latest reforms are in addition to a raft of other changes announced over the past few years including a mandate that as of October 2025, homes let under a new lease will require energy-efficient cooling and heating systems as well as insulation and draught proofing.
Outgoing gas hot water systems will also need to be replaced with an electric pump or solar water heater and, as of 2023, rent providers must provide a good reason to refuse a request for pets to live at a property.
Mr Nicolls said property investors also feel at a disadvantage when disputes go before VCAT, with outcomes heavily favouring renters. Matters are often delayed and adjourned making it difficult to get swift outcomes. Disputes stuck in VCAT can cost rental providers significant amounts of money if rent is not being paid or tenants cannot be evicted.
Mr Nicolls fears the exodus of Victorian property investors , many of whom are looking to invest in other states, will continue as more and more regulation strangles the sector.
According to the REIV, between March 2023 and March 2024, the amount of bonds held by the Residential Tenants Authority in Victoria fell by 20,000 indicating properties are being removed from the rental market.
The figure doesn't surprise Mr Nicolls who believes that more update figures would reveal that this number would have significantly increased.
"It is very hard to make a profit if you're a rental provider. Those with investment properties are paying land tax, rates, high interest rates, funding compliance checks and other fixed outgoings. And there is no capital growth. Victoria is stagnating."
KR Peters Senior Property Manager Rebecca Nicolls said these and other reforms have given renters all the power and rental providers "no power, even to move into their own property that they have poured massive amounts of money into".
She said compulsory compliance checks were introduced to ensure properties are safe and well maintained. However, she believes the checks should be every five, not two years.
"Renters are now allowed to make modifications to premises such as painting, putting up hooks including baby gates and TVs that all damage the premises and never get fixed," she explained.
"The property is supposed to be brought back to the original condition, which is part of this new reform, however it is never done. "
Mr Nicolls said the new changes should not alarm rental providers who already use a professional, trusted property management firm like KR Peters.
However, he is concerned that as investors pull out of the market in Victoria, the pool of available properties for rent will shrink even further and exacerbate the housing crisis.
"The long and short of it is that if there are fewer properties on market for renters I don't know where they find a roof over their heads," he said.
"There is nothing like equilibrium at the moment or support for rental providers. The system has swung the other way and poor rental providers have nothing to smile about. "
For more advice on the latest rental changes and other real estate matters contact the team at KR Real Estate at Officer 5943 1111 or Wantirna South 9800 0000.