Environment Victoria's proposal would see minimum energy efficiency standards for rentals, but some fear costs could be passed on to tenants

A new report argues minimum efficiency standards could save tenants about $850 a year. Picture: DAVID MILLAR
A new report argues minimum efficiency standards could save tenants about $850 a year. Picture: DAVID MILLAR

A local sustainability group president has welcomed calls for minimum energy standards for leased properties, while a real estate group fears it could bump up rents.

Advocacy group Environment Victoria’s Bringing Rental Homes up to Scratch report argues minimum efficiency standards could help save tenants about $850 a year on power bills.

The Bendigo Sustainability Group’s Chris Weir said it was “a great idea, and a long time coming.”

Environment Victoria efficiency campaigner Anne Martinelli said landlords were often reluctant to pay to improve energy efficiency of rentals because bill savings mostly went to tenants.

“Victoria’s 600,000 rental homes are much less likely than owner-occupied homes to have basic efficiency measures like insulation. This means renters are paying more for energy bills or putting up with dangerously hot or cold living conditions to save money,” she said.

Rental homes were only required to meet building standards in place when they were constructed, Ms Martinelli said, with some built 100 years ago. She said the government was reviewing rental laws and had an opportunity to rectify the issue.

“A basic package of efficiency measures could cost around $5000 over five years – probably less for landlords who already keep their properties in good repair. That’s only around 5 percent of median rental income of $20,000 a year,” she said.

However, the Real Estate Institute of Victoria opposed the idea. CEO Gil King said the overwhelming majority of rental properties were already of a high standard.

“Over-regulation of property conditions will increase rents across the state and reduce available rental stock at the lower end of the market,” he said.

“While rental prices in Bendigo remain considerably more affordable than in Melbourne, the cost of introducing mandated energy efficiency standards is likely to be passed on to tenants.”

Ms Martinelli said Environment Victoria’s proposal would see standards gradually phased in, giving landlords the chance to spread investments over a number of years.

“This will keep costs affordable and minimise the risk of unintended consequences such as rent increases and evictions,” she said.

Mr King said if the government was serious about improving rentals’ energy efficiency it should offer incentives to landlords or subsidise the costs of improvements.

Environment Victoria’s proposal came as the BSG focused its attention on energy efficiency. In the coming months the group would begin offering evaluations and advice on improving the energy efficiency in local homes as part of the Victorian Residential Efficiency Scorecard program, Mr Weir said.