150 reforms, a $50m regulator and three strikes: should your next investment property be in Victoria?

The number

More than 150. That is how many renters' rights reforms the Victorian government says it has introduced, according to Minister for Renters Tim Richardson, as reported by realestate.com.au on 12 October.

The latest batch started this week. On the same day, the Victorian Greens asked for one more: a licence for every landlord in the state, with three strikes before the licence is revoked and the owner is banned from renting out homes.

If you own a Victorian rental, or you have equity and are deciding where the next one goes, this is the number to sit with. Each reform on its own is small. 150 of them is a system.

What changed this week, and what is still only an idea

Two different things happened at once, and the headline blurs them. Keep them separate.

The first is law. From this week, Victorian landlords must:

• Tell a renter in advance, with evidence, if they intend to claim on the bond at the end of the lease.
• Keep records proving the property met rental standards before it was advertised.
• Have a gasfitter check the property within six months before draughtproofing work is done. Draughtproofing itself becomes mandatory from 1 July next year.

The second is a proposal. The Greens want a landlord licensing scheme run by an independent regulator, which the party estimates would need about $50 million to set up. Three strikes and the licence goes. The argument, put by Greens renters spokesperson Gabrielle de Vietri, is that Victoria already licenses beekeepers and metal detector users, and that an owner who cannot provide a safe home should not be a landlord.

It is a policy call from a minor party ahead of an election. It has not passed. It may never pass. Nobody should restructure a portfolio over it.

But one detail in the article deserves more weight than it is getting. The Greens took four rental policies to the last Victorian election: a rent freeze, an end to no-grounds evictions, a ban on rental bidding, and minimum standards. Three of the four are now law. Only the freeze was refused.

That is three from four. Treat the licence idea accordingly. Low probability this year, not zero over a ten-year hold.

What it means if you have equity to deploy

Most investors price three things when they choose a market: entry price, rental yield and growth prospects. Regulation sits in a fourth column that most people leave blank.

Victoria is now the state where that column has the most entries. Industry bodies quoted in the article do not hide their view. The Property Investors Council of Australia called the licence idea "an overreach" and said it would make Victoria "the least investor-friendly state". The Property Council said the rules would push capital "to New South Wales and Queensland".

Those are lobby groups doing their job, so discount the tone. Keep the substance. Compliance in Victoria now has a time cost and a paperwork cost that it does not have in most other states, and the direction of travel over several years has been one way.

Victoria remains investable. But the rules are now a cost input, and you need to know the cost before you sign.

The decision and the trade-offs

If you are weighing a Victorian purchase against another state, the honest comparison looks like this.

Against Victoria: a compliance workload that grows every year, a bond process that now requires evidence up front, a draughtproofing deadline about nine months away, and a live political proposal that could attach a licence to your right to rent. None of these has a published dollar figure yet, and anyone who gives you one is guessing.

For Victoria: 2 million renters, by Tenants Victoria's count, who need somewhere to live. The same outlet that ran the licensing story also reports Melbourne rents at record levels. Rules that make it harder to be a landlord tend to reduce the number of landlords. They do nothing to reduce the number of renters.

That is the trade-off nobody puts in the headline. Every exit by a frustrated owner is one fewer home competing with yours for a tenant. Whether that works in your favour depends on whether you are set up to carry the compliance load without it eating the return.

For an investor with existing Victorian holdings, the decision is narrower: get the records, the gasfitter check and the draughtproofing plan sorted now, while they are a chore rather than a strike.

For an investor with equity and no Victorian exposure yet, the question is concentration. One state's parliament should not be able to change the rules on your whole portfolio in a single sitting. Spreading holdings across states is the plainest protection against that, and it costs nothing but discipline.

The Ripehouse reframe: the state is the wrong unit

Most of the commentary talks about "Victoria" as if it were one asset. Victoria is several hundred suburbs and tens of thousands of streets, and they are not having the same year.

Within the same Melbourne suburb, two streets can be having completely different outcomes on days on market, vacancy and resale. A licensing regime, if it ever arrives, will apply to both equally. The rent, the tenant demand and the growth will not be equal, and never were.

So the question to ask is smaller and more useful than "should I buy in Victoria?". It is this: does this specific street, on this specific asset, produce enough yield and growth to carry whatever compliance cost Victoria lands on, with margin to spare? If yes, the licence is a line item. If no, the licence was never the problem.

We do not ask anyone to take that on faith. We publish our client results across 997 client portfolios since 2021, including the portfolios that underperformed. The pattern in that data is consistent: the right asset on the right street, held through rule changes, beats a good headline bought at the wrong address.

Structure, not timing. The rules will keep changing. Street selection is the part you control.

If you are deciding whether your next purchase belongs in Victoria or across the border, Jacob's free live webinar walks through how we test that decision street by street.