Healthy Homes - Impact

Market Implications

[10 Oct 2019]

What might all this mean for you? Well apart from the cost, we think that more and more rentals will be advertised as HH compliant and having HP's. These properties will achieve higher rents, and rent more quickly.So, if you leave compliance until later it will likely have a hidden cost for you. In addition, as with the insulation requirements, many landlords will leave compliance until the last minute. But, unlike insulating where in a pinch you can do it yourself, only registered electricians can install HP's. We figure that the cost of installing a HP will likely go up in 2021 as demand increases.

Some newer landlords will sell up in 2020-21 rather than face these costs,especially when they can no longer claim a tax refund. Oh, (and wouldn't you know it) the cost of installing a HP is not tax deductible, but has to be depreciated over time. With all of these changes from the current Government, it is becoming much much harder to be a landlord. Landlords have to pay the letting fee, thousands of dollars for HHL compliance, get no tax refund, and perhaps soon can't even get rid of anti-social tenants with the 90 day notice provisions. As well when buying a new investment property, there will now be many more costs and complications after settlement.

We expect that there will be less new interest in property investment,fewer properties to rent out, and rents will go up. Over time, and especially after 2021, existing investors will likely see a much better rental return.