Sell or spend? Victorian landlords grapple with new laws requiring minimum standards

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Landlords in financial strife across Melbourne are rushing to sell their investments as new rental laws that require minimum standards for properties come into effect.

The laws, introduced on March 29, mean some landlords would rather sell up than fork out to meet what is required.

Landlords knocked about by COVID-19 are now looking to sell, rather than spend to bring properties up to standard, raising fears of fewer available rentals and higher rents.  In March, Melbourne’s vacancy rate sat at 4.6 per cent, down from 4.7 per cent in February, Domain data shows.

Stockdale & Leggo Victoria CEO Charlotte Pascoe said there had already been a rush of landlords from the outer-eastern suburbs looking to sell up over the past few days.

“Our Langwarrin office has received 20 requests from landlords wanting to sell,” Ms Pascoe said. “It’s just diabolical, it’s huge.”

Some landlords had struggled throughout COVID-19 without being able to collect rent or insurance for loss of rental and were now faced with spending extra to fix up their properties.

“All of this is going to make it harder for tenants because there will be fewer properties and rents will go up because of it.”

While many of the new minimum standards for rentals were formalising what was already in place, there had been a lack of clarity around the new legislation making landlords nervous about the future, Ms Pascoe said.

Under the new standards introduced by the Victorian Government properties must:

  • Include lockable windows and external doors;
  • Provide a working kitchen and toilet;
  • Include window coverings in bedrooms and living spaces to provide privacy;
  • Provide a fixed heater in any property. By 2023, this heater must have a two-star energy efficiency rating;
  • Contain a shower head that has a water saving rating of at least three stars;
  • Have checks of gas or electric appliances like stoves and heaters every two years;
  • Ensure there are proper switchboards with circuit breakers in rentals.


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