How changes to Queensland’s residential parks legislation could impact your investment

By Kristy Dorney, Mark Lyons and Jordan Petrie

Proposed changes to cap rent increases, ban market rent reviews and establish an opt-in buyback scheme have been introduced into the Queensland Parliament.

While changes to the Manufactured Homes (Residential Parks) Act 2003 (Qld) are aimed at addressing the concerns of owners of manufactured homes, there are potential impacts that residential park operators, developers and even homeowners need to be aware of.

A direct impact of the legislative rent cap will be a limitation on the rental stream generated for a residential park operator. This, coupled with a banning on market rent reviews, may impact the viability of residential parks in the long term, especially when factoring in the maintenance of the park and the impact this can have on homeowners in the park.

As Jen Williams of the Property Council of Australia has pointed out, market reviews ‘allow park operators to protect the interests and investments of homeowners through continued reinvestment in the park community’, which maintains resale value and the homeowner’s potential capital gains.[1]By banning market rent reviews and capping rent increases, the investment return for both the operator and the homeowner may be impacted.

The buy-back scheme may also impact smaller independent residential park operators. Given it is a homeowner opt-in scheme, the park operator will be required to bear the costs of servicing the scheme. These costs include acquiring the property at an agreed price, reduced rental income where the property is not sold, and any costs associated with QCAT extensions or reviews. As such, the investment return and viability of independent parks may be impacted.

Property developers in the residential parks market may also have their investment impacted by these changes. Given the increased costs associated with the buy-back scheme and the limitation on the rental stream from the rent caps and ban on market rent reviews, demand from people or organisations looking to further invest in the operation of residential parks may decrease as other property investment opportunities offer a more viable long-term result.

If you have any queries about the proposed changes, please reach out to a member of our team to discuss. Our Queensland real estate team is recognised for its experience across commercial, industrial, retail and residential property, and for providing advice on complex property issues.

This article was written with the assistance of Emily Rogers, Law Graduate.

[1] Jen Williams, Property Council of Australia, Letter to Minister Scanlon, 10 August 2023.