For the past several weeks, the Queensland Government has proposed changes to property legislation in Queensland that would limit rent increases to once per year. This proposal comes amidst a trend of rent increases in Queensland over the past three years that have outpaced other states and territories, particularly for lower priced properties, due to high demand and limited supply.
Currently, there is no indication that these proposed changes will set any restriction on the amount by which rents can rise annually. As of now, the proposed changes are still being discussed in Parliament and nothing has been finalized.
Currently, Queensland legislation allows for rent increases every six months, which is the same as Western Australia and the Northern Territory. If the proposed changes are implemented, Queensland would be aligned with New South Wales, Victoria, Tasmania, and South Australia, where rent increases are allowed only once every 12 months. The Australian Capital Territory is the only territory that differs, with limits on rent increases not exceeding 110% of the Consumer Price Index (CPI) in 12 months.
The theory behind these proposed changes is that by limiting the frequency of rent increases, there may be a higher chance of market conditions returning to a more balanced state with an equilibrium between supply and demand. In reality, reducing pressure on rents would require a significant increase in the availability of properties or a reduction in the number of prospective tenants, both of which are unlikely to occur in the Sunshine Coast property market in the near future, as our region continues to experience a constant influx of new residents.
Unless further amendments are made to the suggested changes, it is unlikely that these proposed changes will have a significant impact on the Sunshine Coast's rental market, as there are no restrictions on the amount by which rents can be increased annually based on market conditions and demand for properties.
Rental prices will continue to be determined by market conditions such as the shortage of properties and rising demand in an open market environment - two conditions the Sunshine Coast has experienced for 3+ years now. As always, our staff will be working closely with you to keep you updated if and when these proposed changes come into effect in the second half of the year and how that may effect the rental market, and what you should do.