Canberra's renters aren't seeing an increase in prices or a drop in availability of rental properties from the introduction of new insulation standards, according to a new report.
Landlords haven't significantly increased prices or taken homes off the rental market since the Minimum Energy Efficiency Standard came into effect in April 2023, according to a government-sponsored report from environmental consultancy Common Capital.
The Minimum Energy Efficiency Standard requires all rental properties to meet a minimum level of ceiling insulation at the R5 level by November 2026.
About 18,500 rental properties or 40 per cent of the ACT's rental stock in 2023 were expected to require insulation improvements to meet the new requirements.
The new report did note that more housing data is needed to understand if the trend will continue, as the deadline to meet the new insulation requirements approaches.
Better homes for renters
Minister for Water, Energy and Emissions Reduction Shane Rattenbury said the findings show the ACT is a step closer to securing better housing for renters.
"Since the new standard was introduced, our monitoring of the program has shown that there has been no impact from the improved standards on rental prices or the number of homes in the market," he said.
"Contrary to the rhetoric of many conservative commentators, our evidence shows that improving rental insulation standards does not lead to landlords taking homes off the market and prices rising. These reforms are making life better for renters."
Rental market stable
The report on the new insulation standard examined rental property volumes and rental pricing in the ACT market, analysed real estate listings and interviewed key stakeholders between April 1, 2023 and February 27, 2024.
The report concluded the standard had not as yet "had any observable impacts on ACT rental property prices or volumes", and the development and implementation of the standard had been delivered on time and on budget.
The sale of rental properties was a significant concern for opponents of the standard, who were worried landlords would sell their properties due to the high cost of installing insulation.
Researchers noted anecdotal reports of landlords considering selling their rental properties, with the energy standard identified as one contributing factor, but concluded that these reports were not reflected in housing sales data over the research period.
The researchers also found landlord compliance with disclosure and ceiling insulation obligations to be "very high", within observation limits of the available data. Landlord compliance with obligations to disclose insulation status in advertisements remained between 85 per cent and 88 per cent.
Reported costs to upgrade insulation remain higher than anticipated in original estimates the report noted, largely due to additional electrical safety compliance costs and benefits.
"Very high" average compliance costs were reported during the first eight months of the standard's implementation, the report found, but the average costs appeared to reduce significantly after an increase in the number of certified insulation installers.
