What Victoria’s rental reforms mean for the Build-to-Rent market: balancing protection and investment

Victoria’s recently passed Residential Tenancies Amendment (Housing Statement Reform and Part 4A Site Agreements) Regulations 2025 and the Residential Tenancies Amendment Regulations 2026 (reforms) introduce significant changes under the Residential Tenancies Act 1997 (Vic) (RTA). The measures aim to increase tenant protection. They also raise practical considerations for landlords and investors, particularly within the build-to-rent (BTR) sector. The cumulative effect of the reforms may influence underwriting, lease-up assumptions, operational planning and, most importantly, investment appetite in Victoria. 

The Victorian Government indicated that they aim to foster safer home environments, fairer rental application processes and more predictable rent arrangements, strengthening the protective safeguards for tenants and imposing stricter and expanded obligations for landlords. 

While Victoria is the first Australian state to tackle rental reform, other states are also moving towards stronger protections and greater transparency for tenants. This momentum, combined with federal attention on BTR, prompt important questions about how best to preserve investment confidence and long‑term stability in the growing BTR sector.

Key rental reforms in Victoria

Victoria’s reforms modernise the RTA framework by lifting disclosure standards, shifting responsibility for certain ancillary costs and raising safety expectations. They also introduce firmer enforcement provisions for non‑compliance. The key changes include:

• Increased disclosure, safety and record-keeping requirements and standardised rental applications;
   
• Ongoing checks, maintenance and upgrade obligations;
   
• Limits on application and payment fees;
   
• Longer notice periods and stricter requirements regarding rent increases;
   
• Expanded infringement regime and penalties; and
   
• Enhanced data and privacy controls, including a narrower scope for information collection and use.

Implications for landlords and investors

The reforms collectively introduce new obligations for landlords, including additional safety and disclosure requirements that promote consistency and transparency in the rental market. Some of the reforms also provide practical benefits for landlords, including more streamlined compliance processes and increased visibility over the criteria against which rent increases will be assessed.

The reforms appear to have been designed with individual residential landlords in mind. They do not differentiate between an institutionally owned and managed, newly developed BTR development and a private suburban rental owned by an individual. Consequently, there is a risk they will have a disproportionate impact on BTR landlords and dampen the level of investment in the Victorian BTR sector. 

Institutional landlords, such as those operating in the BTR sector, typically manage large-scale portfolios with standardised tenancy structures, professional management frameworks and long-term investment horizons that fundamentally differ from those of individual landlords. Measures that restrict operational flexibility or impose disproportionate compliance burdens on institutional landlords may deter large-scale investment in new residential development, with potential adverse effects on housing supply at a time when increasing the availability of rental accommodation remains a critical policy objective. For example, the requirement for properties to have met all prescribed minimum standards at the time they are advertised for rent (as opposed to just at the time when a tenant moves in) could disproportionately impact BTR landlords as it effectively prevents pre-leasing within new developments. Particularly for larger BTR assets, this would extend lease-up periods (a key metric for BTR investors, financiers and operators), have a negative financing cost as a result, and provide no obvious benefit to tenants.

The significant restrictions on the information that can be requested from prospective tenants also has the potential to impact BTR landlords to a greater extent than individual landlords. The scale of BTR developments, combined with the focus on amenity and fostering community, means that the inability to obtain sufficient information to adequately screen applicants can have material adverse impacts on the overall tenant experience within a BTR development and increase operational and financial risk. 

The Real Estate Institute of Victoria (REIV) called on the Victorian Government in June 2025 to amend the RTA with the aim of restoring stability and investment viability in the rental market by: 

• strengthening landlord rights in response to tenants engaging in illegal activity or misleading behaviour; 
   
• tightening legislative provisions that enable repeated non-payment of rent and other tenancy obligation breaches; and 
   
• aligning tenant intention-to-vacate notice periods with those applying to landlords. 

Amendments such as these (which have not been adopted) would provide a more balanced environment for institutional landlords by ensuring they are afforded appropriate protections for their significant investment in the housing market. This would have flow on benefits for the levels of supply in the market, particularly the supply of institutionally managed, investment-grade housing stock that provides tenants with a level of amenity, service and security of tenure greater than that typically available in the private rental market. 

What Victoria’s reforms mean for Australia

While Victoria is at the forefront of rental reform in Australia, the broader national trajectory is clearly moving with it toward stronger tenant protections. Other states and territories have introduced, and continue to introduce, reforms such as limits on rent increase frequency, strengthened minimum housing and safety standards, longer notice periods and clearer disclosure requirements. Collectively, these changes point to a rental landscape undergoing consistent reform across Australia, moving steadily toward increased protection and stability for tenants. 

How these shifts ultimately influence the BTR sector remains to be seen. While tenants need a level a protection, the cumulative and evolving compliance obligations on landlords have the potential to temper operational efficiency and investment appetite as the reforms continue to unfold. Recent federal reforms which apply to BTR developments seeking concessional tax treatment, whilst generally welcomed by the sector for providing certainty as to the relevant eligibility requirements, also amplify the operational and compliance burden faced by BTR landlords.