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Aussie renters losers in property game

08 January 2014 Reporter

An Australian academic has called for stronger tenant protection, claiming renters are losing out as a result of the strong demand for investment in Australian properties.

In a column published in yesterday’s The Conversation, Dr Kate Shaw, research fellow at the University of Melbourne, wrote that renters were losing out in the Australian property market that was being exacerbated by a growing global investor market. 

“Not only do they struggle with high rents, but tenant protection in Australia is among the weakest in the developed world,” she said. “This is not coincidental: Australia’s 1.8 million and counting property investors support and are supported by tenancy legislation heavily weighted in favour of landlords. This produces a fundamental lack of security in rental housing.”

Dr Shaw highlighted that North American and European countries had much stronger tenant protection in place, including rent control and security.


For example, rents in Victoria could be increased every six months with no limit on the amount, while in Germany, rent increases were capped at 20 per cent every three years. Landlords who overcharged could be fined.

In contrast to Australia, where land and housing were treated as commodities, the combination of large landholders and strong tenant protection in Europe created a self-reinforcing cycle that maintained house prices and rents at relatively stable and affordable levels.

“The resulting security means Europe doesn’t have anything like the stigma against renters that can be found in Australia,” Dr Shaw said.

However, cultural attitudes to renting were changing, with a growing generation of people now preferring to rent and, as such, institutions needing to follow, she said.

“The potential role of Australian superannuation funds in investing in housing has been avoided for too long. For decades, trillions of dollars of workers’ hard-earned super has been distributed over a range of investments without alleviating Australia’s crisis of housing affordability,” she said.

“The super funds are finally reconsidering this position, and so too should Australia’s legal practices adapt. Legislative changes should be made to facilitate significant super fund investment in secure and affordable rental housing, followed by strengthened tenancy protection.

“If these changes were coupled with a reduction of the tax incentives to small property investors, the market would shift dramatically. But this would require Australian voters to curb their enthusiasm for the property game, and what are the chances of that?”

Aussie renters losers in property game
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