![Falk and Co director David Falk has had an increased number of calls from landlords who are considering selling. Falk and Co director David Falk has had an increased number of calls from landlords who are considering selling.](/images/transform/v1/crop/frm/379mw9XPZ7UFRqmwjWhGKkr/a6998ddb-fa6d-4d10-9ab6-e8a46c52f569.jpg/r0_0_1019_876_w1200_h678_fmax.jpg)
Landlords with investment properties in Warrnambool are considering selling, according to Falk and Co director David Falk.
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He said the state government's new and increased land tax on investment properties, rising costs associated with regular safety checks in rental properties and rising interest rates were concerning property owners.
"We've had a lot of our landlords contact us about their properties - even our very solid landlords who have been with us since 2008 and were with David Phillips prior to that for 20 to 30 years," Mr Falk said.
He said a number of investors had decided to put their properties on the market.
Others are seriously considering a rent increase to cover their costs.
"Landlords are having to spend money on electricity and gas checks and they have to pay someone to check their smoke alarms each year," Mr Falk said.
"Add to that the extra land tax and rising interest rates and the owners - especially the mature ones - are rethinking their position."
This is despite Treasurer Tim Pallas saying he didn't believe the additional burden on landlords would lead to rising rents after the state budget was handed down.
"It's a matter of what the market will pay."
He said the "substantial problem" in the rental market was a lack of stock and he didn't believe landlords would "necessarily" pass on the costs of the tax.
Mr Falk said the Warrnambool rental market was extremely tight and a lack of supply had driven up prices.
"The market is very tight and it's only going to get tighter," he said.
Mr Falk said Falk and Co had three listed rental properties and was receiving regular emails from people desperate to find a property to move to the city.
"We're getting a lot of emails but we just don't have the properties for them at the moment."
He said he believed the state government needed to reconsider the additional land tax.
Mr Falk said if the state government imposed a rental cap, it would add to the housing shortage crisis.
"A rent cap will deter landlords from investing," he said.
"If they haven't got control of their own investment and interest rates continue to rise, they will put their money elsewhere."
The Real Estate Institute of Victoria (REIV) said this week almost 90 per cent of real estate agents have had an increase in the number of landlords contacting them who are looking to recover increased costs from the new land tax.
In addition to that, seven in 10 agents have had an increase in the number of investors wanting to sell.
REIV chief executive officer Quentin Kilian said the survey provided hard evidence that the 2023-24 state budget's land tax increase was bad policy.
"It beggars belief that while Victoria is facing housing supply and affordability headwinds, the state government would introduce a new tax that will only exacerbate the problem," Mr Kilian said.
"REIV members are at the coal face of the housing sector and their engagement with renters and rental providers every day has brought some uncomfortable home truths - the rental crisis is real and will only get worse with the introduction of this new tax."
CoreLogic said there was evidence there was a growing number of investors selling their properties.
"It's not clear exactly why investors are selling as individual circumstances would apply to each listing and without asking vendors directly, it's unknown what the drivers are," a spokesman said.
"There are of course a few things that might be prompting the sales.
"The first driver might be higher interest costs over the course of the year.
"Based on average interest rates for investors, we estimate mortgage costs on a $500,000 loan will have increased $860 per month to $3213.
"While rents have risen at a record pace over the past few years, they generally have not risen as much as mortgage costs on a new loan. If the interest burden is becoming too high amid an already high inflationary environment, investors may be looking to offload their investment."
The high demand for rentals in Warrnambool is driving up prices, with very few properties in the lower price range available.
A studio apartment and a two-bedroom unit are both listed for $300 a week, while the cheapest three-bedroom house is listed for $370 a week.
Families looking for a four-bedroom house will likely have to pay at least $500 a week.
Everybody's Home recently revealed Australia was experiencing the worst housing crisis in living memory.
"The time for repairing our housing system has arrived," a spokesman said.
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