A very narrow gap between gross rental yields and mortgage interest rates is a buy signal for investors.
Victorian coronavirus residential landlord-tenant landscape: the new rules and role of key government bodies in two charts
At first blush, the Victorian COVID-19 Omnibus (Emergency Measures) Bill 2020 legislation that underpins the new rules and supports for landlords and tenants that was rushed through the state parliament and Royal Assent during April 2020 can be very overwhelming on one hand and and actually not very revealing on the other hand. Essentially, the legislation was an enabling device giving the executive - the State Government - the powers to create and amend emergency rules for the rental market for the next few months.
To truly understand the rules, one has to pick through the statements and polices of the state government. But there isn't really one place on the Victorian government website to do that.
Consumer Affairs Victoria is the lead government body. They are essentially the rule setter and umpire with respect to the landlord and tenant relationship in these times. Consequently most of the story can be found on the Consumer Affairs website.
But a significant aspect of the story relates to financial support for landlords and tenants: the rent relief grant and land tax relief. These elements involve the Department of Health and Human Services and the State Revenue Office respectively. Note that there has been some conflicting messages from these departments (which has been acknowledged to us by Consumer Affairs) about whom is the ultimate beneficiary of the rent relief grant. From our enquiries we have established that the tenant is. The grant is transmitted from DHHS to the landlord or their agent, and then must be used as part credit towards the tenant's periodic revised rent payment. It cannot be used to part compensate the landlord for the dollar gap between the old and new rent rates. Landlords must bear this in mind when negotiating a 'sharing the pain' revised rental agreement with covid-19-affected tenants.
We have boiled down all the important information into the two charts and three links below. If you would like to delve deeper into the process of negotiation and claiming support, please watch our recent videos.
Chart one: Victorian coronavirus renatal rules in six points
Chart two: the key Victorian parties related to tenants and landlords during the coronavirus pandemic
Key state government bodies / departments / agencies
Consumer Affairs Victoria - https://www.consumer.vic.gov.au/resources-and-tools/advice-in-a-disaster/coronavirus-covid19-and-your-rights
State Revenue Office (Victoria) - https://www.sro.vic.gov.au/coronavirus
Department of Health and Human Services (Victoria) - https://www.housing.vic.gov.au/help-renting/rentrelief