Investors have made it clear a balanced approach to rental reform is essential in the next term of government, according to a recent REIWA Survey.
"Changes to property tax settings or tenancy legislation were overwhelmingly identified as catalysts which would influence investors to sell their investment properties," REIWA CEO Cath Hart said.
"The results from REIWA's Housing Issues Survey show 83 per cent of respondents* indicated changes to property tax would influence their decision to sell their investment property, while 74 per cent of respondents* said changes to legislation would influence their decision to sell their investment property.
"With upcoming State and Federal elections, Western Australian's have made it clear that they are very focused on the housing policies proposed by parties across the political spectrum.
"Supply and affordability are the key issues in regard to housing and we know that private investors provide 85 per cent of rental housing in the Western Australian rental market. About 70 per cent of investors are mum and dad investors with one property."
Ms Hart said investors have historically been highly sensitive to changes in regulatory settings.
"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."
Ms Hart said recent improvements in the availability of stock in WA's rental market was partly due to a legislative environment.
"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.
"In addition, the Short Term Rental Accommodation and Vacant Property incentives have seen over 420 properties added to the rental market since launched.
"This contrasts with other states where a punitive approach has been taken, such as Victoria which has reduced land tax thresholds for investors as part of the COVID debt levy and introduced strict regulations for landlords including high compliance requirements and is now seeing a decline in the number of rental properties as investors leave the market."
Ms Hart said WA's rental supply still had some way to go to return to a balanced 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.
* proportion of respondents who identified as investors in a REIWA Survey.
