Why 'punishing' residential property investors can hurt renters
REIQ CEO Antonia Mercorella has launched a spirited defence of residential property investors from those who think they are only preoccupied with wealth and greed.
Speaking on the Property Brief podcast, Mercorella says investors provide the vast majority of rental accommodation in Queensland and governments need to be very careful about implementing reforms designed to discourage investment.
She pointed to the unprecedented demand for rentals in virtually all parts of regional Queensland where vacancy rates were under one percent.
"We classify anything from 2.6 percent to 3.5 percent as healthy, so we are a long way from what we would classify as a healthy market," Mercorella says.
"Now that's challenging because it makes life for property managers hard. And it makes life really difficult for renters - which is a problem when you think about the fact that over 36 percent of Queenslanders rent their homes."
Early indications of the new tenancy reformsMercorella says the industry had seen landlords taking advantage of the strong sales market to sell up.
But the effect of new tenancy reforms passed through State Parliament last year had also seen some landlords declare "I'm out" and sell their investment properties.
"We know that the vast majority of rental properties in Queensland are being provided by private investors. And the frightening thing is, I think we're probably only in the early stages," Mercorella says.
"I think when those reforms are actually proclaimed and come into effect, investors will actually start to understand what those reforms mean.
"And keeping in mind that we know that there's a phase two yet to come, I think we're going to see more investors and prospective investors saying, 'I'd rather invest my money somewhere else where I have greater freedom to do what I want with my asset'."
Mercorella was also highly critical of "crazy" new land tax reforms targeting investors introduced by the State Government late last year.
"And again, there's this fairly consistent pattern of behaviour that's about beating investors over the head and almost punishing them."
Tackling misconceptions of residential property investorsMercorella says there's a misconception that "if you own an investment property, you must be really wealthy and greedy".
"And sure, there are some who have got extensive property portfolios and they may be very wealthy individuals. But in the majority of cases, they are 'average' income earners who have made a decision to invest in property and accept that it comes with some high risks and obligations."
Mercorella says tight vacancy rates had led to stories of people living in cars and families who had to potentially leave their communities - where they had jobs, kids in school and social groups - because they couldn't afford the rent or there wasn't enough rental stock available.
"You know, these are the stories on the ground that I think impact all of us, and I think sometimes there's a perception that the REIQ is only about vendors and we're only about landlords - and that's all that we're concerned about.
"That couldn't be further from the truth. We want a good balanced market for everyone that is fair...and we want to see everyone with shelter over their heads at the end of the day."
Listen to the full interview with Antonia Mercorella on the Property Brief podcast.
For more information about property investment, read our articles.
15 Nov 2019
3 min read
Are your property transactions safe from cybercrime?
The property market is the perfect playground for cybercriminals - large sums of money are constantly being transferred between parties with the majority of communications sent via email.
15 Nov 2019
5 min read
Be careful what you do with confidential information
The recent settlement of a claim between a real estate agency and a former employee serves as a timely reminder to real estate professionals that utilising a former employer's confidential client information can be very costly.