Canberra's sky-high rents could be pushed even higher under proposed tenancy law reforms expected to be introduced in the ACT Legislative Assembly next week, the industry body has warned.

REIACT Director and Property Management Committee Chair, Mr Craig Bright, says the changes would impose additional costs on landlords, which will ultimately need to be recouped by way of increased rents - adversely impacting housing affordability.

"From our point of view, we're concerned they are trying to impose some form of rent control, and if you go beyond the specified formula, it's then on the landlords to justify higher rent," he told WILLIAMS MEDIA.

He's also concerned the reforms, particularly a proposal to limit rent increases to inflation may drive interstate investors from the Canberra market.

"We're concerned that these proposed amendments will cause depletion. We're already experiencing high vacancy rates, and the more impediments you impose could lead to some people selling their investment properties because they're not getting their return," he told WILLIAMS MEDIA. 

“Whilst REIACT is still in consultation with the ACT Government regarding the proposed amendments, our key concerns point to the potential impact of these changes on both lessors and tenants alike," Mr Bright said in a REIACT media statement. 

The proposed changes include making rentals more pet-friendly, allowing renters to make minor modifications to rental properties without needing the permission of the landlord, limits on lease-breaking fees, and putting the onus on landlords to justify rent rises deemed excessive beyond inflation.

But Mr Bright says the impacts of the proposed changes, which have been modelled off the changes to the Victorian Residential Tenancies Act "need to be considered in the context of the current rental market in the ACT".

“This is of concern to the Real Estate Institute of the ACT, as not all states and territories are experiencing the same market conditions. Individual jurisdictions should be very cautious with regard to the unintended consequences that can arise," he told WILLIAMS MEDIA.

Mr Bright says real estate agents are extremely concerned about the potential effects the proposed changes will have on rent rises, which could exacerbate the issue of investors fleeing Canberra which is already happening, due to high rates and land taxes. 

"Additional cost imposts incurred by the lessors must ultimately translate to higher rents. We are already observing market stress as a result of diminishing supply, with fewer investors, much tighter lending conditions and current government policy settings as they relate to statutory charges in the ACT.

"This means that potentially there are going to be fewer properties to rent, which in turn results in higher rents as competition for diminishing numbers of properties increases.”

Mr Bright says the institute is also concerned about allowing pets in rental properties.

"In the current market where there are generally multiple applications for a rental property, a landlord would have the option to select a tenant who doesn’t own a pet as the easier route to follow. That could then impose additional costs for the landlords, which will ultimately translate to rents.

"The current provisions allow for negotiation between the two parties and there is very little evidence that the current practice is not adequate,” he said.

The Real Estate Institute of Victoria CEO Gil King is also opposed to this particular amendment, arguing it will "effectively extinguish a landlord's fundamental property right".

"I agree with Gil - you are removing a property owners intrinsic right as the owner, and that's a very dangerous precedent. The vast majority of investors are mums and dads - not big corporations. They have saved enough to purchase an investment property as part of their retirement strategy - why should they be penalised for that?"

Mr Bright says the legislation isn't looking after landlords. 

"It's just another measure that will cause people to question whether they will invest in property. The more legislation, the more of imposition, and the government has made it very clear that this legislation is pro-tenant, and the question the REIACT has is who is looking after the property investor?"

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