Victorian renters could face rent increases of up to $65 per week if proposed energy efficiency standards are implemented.
The Victorian Government plans to introduce minimum energy efficiency requirements for rental properties starting in October 2025, which would mandate the replacement of gas appliances at the end of their life with electric alternatives.
The Gas Appliance Manufacturers Association of Australia (GAMAA), in its submission to the Government, cited research by Frontier Economics, which suggests these changes could result in up to $27,000 in additional costs for rental property owners.
“The additional costs that would be forced on rental providers are also likely to result in withdrawal of rental properties from the market at a time when many Victorian families are finding it hard to secure a rental property and make ends meet,” said Ross Jamieson, President of GAMAA.
He added, “These new standards are also likely to result in tenants living in colder homes.”
Mr Jamieson said the financial burden of these changes would likely be placed on renters.
“Frontier research has found the cost of gas to electric appliance conversion can be up to 12 times higher than the average cost reported in the [Regulatory Impact Statement].”
He said that the Victorian Government “seriously underestimates the cost of the necessary electric power supply upgrades,” which could lead to negative outcomes for renters.
Anthony Wiseman, Associate Director, Property Management, at Marshall White, said that while the regulations haven’t yet been legislated, they would create a rolling financial impact on landlords.
He emphasised that although operational gas appliances won’t need to be replaced immediately, costs will gradually accumulate as the new regulations roll out and other aspects of the proposed changes, such as mandatory blind cord safety and insulation upgrades, also present challenges.
“Draft proofing of older properties is going to be a massive challenge, and once you start with draft proofing, you also have to address ventilation, which many haven’t considered.”
While Mr Wiseman acknowledged the benefits of more energy-efficient homes, he cautioned that the costs involved will inevitably be passed on to renters.
“Landlords will recoup these costs through higher rents. It’s just part of operating in a regulated market, and tenants will end up bearing the brunt of these changes.”
