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The private rental sector has expanded rapidly over the last decade and a new report has suggested that regulations and policies have not kept up.
An AHURI report titled The future of the private rental sector details how the private rental sector (PRS) has grown by 36 per cent over the last decade and suggests that policymakers should consider the effectiveness of existing settings.
The research, undertaken by Swinburne University of Technology and the UNSW studied the institutions, policies and practices of the private rental sector in Australia and nine other countries.
The research found that over a quarter of all Aussie households are privately renting and that number is only growing, but by international comparison, Australia has the weakest laws regarding security and rent regulation.
Researcher Dr Chris Martin, from UNSW said that places like Germany, which had a similar market, had stronger tenants rights and Australia’s laws didn’t stack up.
“Australian landlords and regulators should regard provision of rental housing here as a business where standards are important,” Dr Martin said.
The research found that privately rented properties’ debt-based financing had increased significantly and was the highest out of all the countries researched by AHURI.
Dr Sharon Parkinson, from Swinburne University said that the Australian sector is unique due to a high integration between houses and flats that transfer between privately owned and owner-occupied.
Dr Parkinson said that while the private sector shares most of its housing stock with the owner-occupied sector, the PRS is also fragmenting and diversifying, particularly at the low end of the market.
“We’re seeing newer markets such as in the student housing sector, new generation boarding houses in NSW, developers retaining units for rent, an affordable rental sector provided by not-for-profit organisations and a growing informal sector,” Dr Parkinson said.
The evidence showed though that investment in rental properties is skewed towards moderate to highly priced rentals, with limited and insufficient dwellings accessible at the low rent end.
The research found that the informal sector was growing, and landlords are acting in unscrupulous ways to increase rental returns, which are under the policymakers’ radar said Dr Martin.
“Informal housing arrangements like room and short stays rentals are growing and they are often under policymakers’ radar unless there are health and safety issues,” Dr Martin said.
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