Why the increases vary:

• Perth and Brisbane have major supply shortages

• Sydney has high demand from students and workers

• Melbourne is absorbing a large international student surge

• Regional areas face tourism and Airbnb pressures

Rent stress affects nearly every demographic.

4. MORE AUSTRALIANS ARE RENTING LONGER OR PERMANENTLY

Renting was once a temporary stage.

Now it is a long-term reality for millions.

Trends (2010–2025):

• Home ownership for under 35s down sharply

• Long-term renting up significantly

• Families renting more common

• Single-person households rising

• Older renters increasing (a major social risk)

Who is renting now:

• Professionals

• Students

• Young families

• Migrants

• Singles

• Lower- and middle-income earners

• Older Australians without assets

Renting is no longer a niche — it is mainstream.

5. INVESTORS HAVE EXITED THE MARKET

Investors supply most of Australia’s rental homes, but between 2022–2025 many left the market due to:

• High interest rates

• High insurance premiums

• High maintenance costs

• Uncertainty over land tax and regulation

• Negative gearing concerns

• Falling yields in some markets

• Better returns in cash and equities

Impact:

Fewer investment properties → fewer rentals → higher prices.

“When investors leave, renters suffer.”

6. STUDENT AND MIGRATION PRESSURES

International students and skilled migrants are essential to Australia’s economy — but their return has collided with housing shortages.

Student Accommodation Crisis

Universities admitted more students than available beds, causing:

• Overflow into nearby suburbs

• Huge rental competition

• Higher rents around campuses

Migration Effects

Migrants overwhelmingly rent before they buy.

Population increases are healthy —
but only when matched with housing supply.

Australia did not match supply to migration intake.

7. SHORT-TERM RENTALS (AIRBNB) REMOVE LONG-TERM SUPPLY

In tourist areas or inner cities, short-term rentals remove potentially thousands of long-term rental homes.

Approximate Airbnb Impact

• Byron Bay: 10–15% of housing stock

• Hobart: 8–10%

• Melbourne CBD: thousands of units

• Gold Coast: significant pressure

• Regional NSW & QLD: substantial removal

More councils are enforcing limits — but progress is slow.

8. RENTAL APPLICATION PRESSURE IS EXTREME

Renters now face:

• 50+ applicants per property

• Inspections with lines down the street

• Higher documentation expectations

• Offers above asking price

• Requests for references, resumes, ID, bank statements

• Competition from higher-income applicants

This creates:

• Stress

• Uncertainty

• Delayed household formation

• Overcrowding

• Difficulty relocating for work

• Lower productivity

Renting now feels like trying to win a lottery.

9. RENTAL STRESS IS BECOMING NORMAL

Economists define rental stress as spending more than 30% of gross income on rent.

By this measure:

• More than 50% of renters aged 18–40 are in stress

• More than 60% of single parents are in stress

• More than 40% of renters in outer suburbs are in stress

• More than 30% of renters aged 55+ are in extreme stress

This is the highest level in modern Australian history.

10. REGULATIONS ARE CHANGING — SLOWLY

States are moving toward:

• Longer leases

• Fairer bond rules

• Limits on rental bidding

• Better minimum standards

• Stricter Airbnb controls

• More tenant protections

But:

• Policies vary wildly across states

• Some reforms reduce investor appetite

• Others have minimal immediate impact

Without more supply, regulation alone cannot fix the crisis.

11. WHAT NEEDS TO CHANGE TO HELP RENTERS

Australia cannot rely on a broken supply pipeline forever.

Real solutions require structural change.

To fix renting, Australia must:

1. Build at least 240,000 homes per year

Including:

• mid-rise apartments

• townhouses

• build-to-rent

• student housing

2. Encourage investor activity responsibly

Balanced tax and regulatory settings.

3. Rapidly expand build-to-rent

To stabilise rental markets.

4. Strengthen rental protections

Without discouraging supply.

5. Increase social and affordable housing

To protect vulnerable renters.

6. Reduce Airbnb overuse where necessary

Through balanced local regulation.

7. Simplify planning systems

To build faster.

WHAT RENTING WILL LOOK LIKE BY 2030

1. More long-term renters

Especially families and older Australians.

2. Rising build-to-rent developments

Better quality, more stable leases.

3. Higher density living

Particularly in inner and middle suburbs.

4. Better tenant protections

Standard across most states.

5. Slower rent growth

Once supply finally picks up (likely after 2027).

6. Stronger government intervention

Especially around:

• social housing

• planning reform

• infrastructure coordination

Renting will improve — but only gradually.

THE BOTTOM LINE

Renting in Australia in 2025 is shaped by:

• chronic housing shortage

• rapid population recovery

• high construction costs

• investor retreat

• student overcrowding

• planning delays

• supply bottlenecks

Renters are feeling the full force of a structural housing failure.

The crisis will not end quickly — but with long-term reform, Australia can shift from scarcity to stability.