A property investor in Victoria says real estate agents bear "responsibility" for the state's housing crisis and is calling for a review of their strategies. The investor's remarks highlight the different perspectives on responsibility and solutions in the current real estate market environment.
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02-08, 2025This week, the Real Estate Institute of Victoria (REIV) submitted property tax reform proposals to the government, aiming to alleviate the land tax burden faced by landlords providing long-term rentals. Rising land taxes have led some real estate agents to claim that landlords are trying to recoup tax expenses of up to $2,000 from tenants.
In Australia, lease agreements are typically for six months to two years. The REIV suggests a 10% land tax discount for three-year leases, a 20% discount for five-year leases, and a 45% discount for ten-year leases. This initiative aims to retain properties that are currently being lost from the rental market.
Jenny, a landlord from Wangaratta in northern Victoria, stated that while the proposal is reasonable, real estate agents also need to be part of the discussion. "Everyone is focused on [expensive] land tax, but we need to look at all the levers that are being used, and real estate agents have a responsibility in this whole equation," Jenny said.
Jenny further stated: "I think they actively discourage long-term leases, so we actually moved our rental property from one agency to another. They flatly refused to help us sign a two-year lease for excellent tenants." She wants to keep rents low to encourage long-term occupancy, but she believes real estate agents oppose long-term leases because it affects their commission income.
"I actually said to the real estate agent, 'I can reduce the rent by a certain amount per week to keep good tenants,' but they didn't like that," Jenny said. "It's not just because they take a cut from the weekly rent, but they also have an annual lease renewal fee, which they could lose if landlords sign long-term leases." This fee can exceed $400, and rent may increase after the lease agreement ends. "Why is this being ignored in the whole discussion?" Jenny questioned.
Scott Petrie of Trevor Petrie Real Estate in Ballarat said he is happy to offer two-year leases to established tenants. "If the landlord is happy with the way the property is being maintained, we are happy to offer a two-year lease," Mr. Petrie said. But he said any longer lease terms could lead to problems. "It can be harder to evict a tenant if something goes wrong," he said. "And it's hard to know what an owner or tenant is going to want in 10 years... they might need to move to another town, they might need a new property. I personally probably wouldn't want to see much more than two or three years."
In Ballarat, landlord Emma said she would happily extend tenants' leases if it meant a reduction in her land tax bill. "The government is making it very hard for us to keep going," Emma said. "We don't want to sell, but our land has gone up by over $1,000 in a year, which is just crazy. We never wanted to increase the rent for our tenants, but we've had to twice. We've been asked to increase the rent again this year, but we can't do that to these people, they're struggling just as much as we are."
REIV CEO, Kelley Ryan, stated that in some European countries, it is common to offer five, ten, fifteen, or even twenty-year lease agreements. "We've also taken learnings from the commercial space domestically, where you can have a long-term lease and as a tenant, you also take on some basic maintenance responsibilities," Mr. Ryan said. "So, if a tap needs fixing or a light blows, you actually take on some of that responsibility... which hopefully gives the tenant more ownership over their home. But we think it's critical to have something that is linked to CPI or just a fixed increase of 2, 3 or 4% per annum." The state government has been contacted for comment.
