A RENT cap would only escalate the crisis in the Victorian property rental market, Mildura real estate agent Mark Thornton has warned.
The director and sales agent at One Agency said there was a “perfect storm” affecting both landlords and tenants.
He said agents were seeing “desperation” from Sunraysia renters seeking homes as well as fear from landlords, who have been hit with rising costs on their investments.
Many people across the state and country have been calling on the government to introduce a rent cap to help struggling renters, but Mr Thornton feared it would only make the situation worse.
“We need to make sure the investors can hold the properties otherwise they will be lost to the market and they will just be less properties to offer our tenants,” he said.
“If the government jump in and start to try and create those barriers to a natural economy, I think we would be in for a bit of strife.”
Landlords have recently faced land tax cost increases, interest rate hikes and increased maintenance costs, making their investments less profitable.
Mr Thornton said landlords were struggling to keep their properties.
“You are going from the properties, typically in the past, looking after themselves, now you have your investors having to tip in $200 to 300 extra a week just to hold them,” he said.
“For Victoria, we are seeing extra costs like land tax, we are seeing the compliance, it is quite an expensive process.
“Talking to some investors … they can’t keep them, because they can’t afford to keep them.”
Real estate analysis company PropTrack’s data showed that 34.5 per cent of the Victorian homes taken to auction last week were former rental homes.
Mr Thornton said if investors couldn’t afford to keep their investments, it would make things worse for tenants who would then have fewer options.
He said he had shown landlords properties in Mildura and they had opted to buy in other states.
“That is a concern for us and for our economy, for people living here who can’t afford to stay here or can’t find a house,” he said.
“The Mildura economy is going to be affected.”
