Landlords express concerns over tighter regulations and potential profit squeeze
Western Australian property investors are closely watching potential rental reforms ahead of upcoming state and federal elections, a new survey by the Real Estate Institute of Western Australia (REIWA) suggests.
REIWA’s Housing Issues Survey found that 83% of respondents would consider selling their investment properties if there were changes to property tax settings. Meanwhile, 74% said adjustments to tenancy legislation would also influence their decision to exit the market.
“Changes to property tax settings or tenancy legislation were overwhelmingly identified as catalysts which would influence investors to sell their investment properties,” said Cath Hart (pictured above), chief executive of the Real Estate Institute of Western Australia.
She noted that housing supply and affordability remain key concerns, particularly given that private investors provide 85% of rental properties in Western Australia. She added that around 70% of these investors are individuals or families with a single investment property.
Historically, investors have reacted strongly to regulatory shifts, Hart said, citing pandemic-period rental legislation as an example.
“For example, the COVID rental legislation enacted in 2020-21 was deeply unpopular with investors and came after a long market downturn in which rent prices declined significantly and vacancies were high,” she said.
“This was one of the contributing factors to a mass exodus of investors from the market in a short period, reducing rental supply by about 20,000 properties and contributing to the rental crisis of the past few years.”
Hart attributed recent improvements in rental stock levels to a stable legislative environment, which has encouraged investment.
“While our relatively affordable housing and the potential for strong rental yields have played a role in attracting investors, the balanced Residential Tenancies reforms announced in 2023 provided certainty for investing in WA,” she said.
She also highlighted that government incentives, such as those targeting short-term rental and vacant properties, have added more than 420 properties to the rental market.
Hart contrasted Western Australia’s approach with Victoria’s, where stricter regulations and tax changes have contributed to a decline in rental property availability.
“Victoria has reduced land tax thresholds for investors as part of the COVID debt levy and introduced strict regulations for landlords, including high compliance requirements,” she said. “This is now seeing a decline in the number of rental properties as investors leave the market.”
Despite recent improvements, Hart said more work is needed to restore balance to the rental market.
“Private property investors supply the vast majority of stock for WA’s rental market, so ensuring stable and balanced regulatory settings is important for tenants and owners alike,” she said.
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