Introduction

• Published date: 01 June 2023
• Author: Barbara Broadway
• Date: 01 June 2023
• DOI: http://doi.org/10.1111/1467-8462.12517

The Australian Economic Review, vol. 56, no. 2, pp. 238–239 DOI: 10.1111/1467-8462.12517

Policy Forum: A Rental Market in Crisis

Introduction

Barbara Broadway*

Home ownership—the great Australian dream—

seems to be increasingly out of reach for many

Australians. Increasing house prices, especially

in relation to wages, have long been on the front

pages of newspapers and at the centre of policy

debates about affordable housing. A host of

policy measures—from shared equity schemes

over government‐backed loan guarantees for

selected demographics to tax incentives for rent‐

to‐buy schemes—aim to make it achievable for

first‐home buyers to purchase a home. And yet,

home ownership rates over the life course have

consistently dropped for successive generations

since the 1970s (Australian Institute of Health

and Welfare 2023).

Long‐term renting thus becomes a more

and more common experience among younger

Australians. But can the private rental market

offer the security, stability and quality of

living space that long‐term renters need? If

buying affordable housing is out of reach for

many, are affordable rental properties avail-

able as an alternative?

After a drop in rents in the first half of 2020,

weekly rents have begun to increase again over

the last two years; in particular rents paid by new

tenants increased by 14 per cent over the year to

February 2023 (Australian Bureau of

Statistics 2023). This increase far exceeds

overall inflation and is at least partially driven

by a decrease in household size in the wake of

the COVID‐19 pandemic. With vacancy rates

also at a historic low (Australian Bureau of

Statistics 2023), renters with little protection

against eviction or rent increases during a

tenancy are left in a very vulnerable position.

At the same time, given general increases in the

cost of living and stagnant wages, particularly

renters in low‐income groups have few re-

sources to deal with increasing rents or to

compete for a new home in a tight market.

Kath Hulse and Zoë Goodall argue that

better protection against no grounds eviction,

well‐designed rent controls and minimum

standards for habitability of a property are

sorely needed—and their research shows that

these do not lead to substantial disinvestment

by property owners.

Bruce Bradbury reviews the arguments for

and against the Commonwealth Rent

Assistance, and proposes that the maximum

rent assistance payment should increase by a

lot more than the most recently announced

increase of 15 per cent, to support adequate

housing consumption and to reduce the net

cost of housing for low‐income groups.

The articlesin this policy forum outline clear

steps for reform and contribute important

thoughts on a long‐term, sustainable private

rental sector. I believe our readership will

benefit from and enjoythese insightful pieces.

References

Australian Bureau of Statistics 2023, ‘New

insights into the rental market’, April,

viewed May 2023, <https://www.abs.gov.

au/statistics/detailed-methodology-

* Melbourne Institute of Applied Economic and Social

Research, University of Melbourne, Level 5, FBE

Building, 111 Barry Street, Victoria 3010, Australia;

email <b.broadway@unimelb.edu.au>.

© 2023 The Authors. The Australian Economic Review published by John Wiley & Sons Australia, Ltd on behalf of The University of

Melbourne, Melbourne Institute: Applied Economic & Social Research, Faculty of Business and Economics.

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