Could this slow Australia’s rising rents or is it a risky move?

Rents continue to rise across Australia, prompting some to call for rent control to give tenants some relief, but experts say it’s a complex idea that could cause more problems than it solves. 

Rents have continued to march higher across the country, with the latest data showing the national median rent growing 5% during the March 2025 quarter compared to the same time last year, according to PropTrack.   

Rental price growth has slowed down considerably from the peak levels seen over 2022 and 2023, but it’s still ticking higher across many parts of the country.  

Renters – who make up one-third of Australian households – are struggling to keep up, and some believe the government should step in. 

Rent control can take different forms, with a rent cap limiting how much rent can increase each year, while a rent freeze would stop increases altogether for a period of time.

Dr Chris Martin, a senior research fellow at the University of New South Wales, said rent control could help tenants avoid sudden, large rent increases. 

“Once a tenancy starts, you could have an increase of not more than once per 12 months and not more than 3% per annum,” he said.  

“That would maintain the value of the return on the investment from the landlord’s point of view … but it would also mean that tenants are protected from larger, unaffordable rent increases.” 

He said some landlords might leave the rental market if new rules were brought in, but it could also create new opportunities including reducing competition for homebuyers.

That said, he said stricter rent controls also came with risks.

REA Group senior economist Anne Flaherty said strict rent controls such as rent freezes could hurt renters in the long run. 

“Of course, it helps to improve rental affordability over the short term,” she said.  

“But it typically corresponds with an increase in investors exiting the market, which can leave renters in a situation where they have to find new accommodation.”  

She said fewer investors meant fewer homes available to rent, which could make the current shortage even worse. 

Ms Flaherty also warned that landlords might spend less on upkeep if they can’t increase the rent to cover rising costs. 

“If the landlord holds onto the property, they may be less likely to do repairs or maintenance,” she said.  

“Rent control could lead to fewer rental properties available for renters, and that could make it even more competitive.” 

While she agreed some rent controls could be helpful in areas with extreme pressure, she said every market was different, and poorly designed rules could create new problems. 

“There are a lot of rental properties out there that are currently renting out for below market value,” she said.  

“In those cases, larger rent rises might be justified, though it creates a difficult situation.” 

With Australia’s rental market under serious strain, the push for renter protections is growing.  

In response, federal, state and territory governments have been working on improving renters’ rights in recent years.  

In 2023, the national cabinet agreed to strengthen eviction rules for renters, limit rent increases to once a year, and introduce minimum rental standards. 

State and territory governments have been rolling out these changes ever since. 

The challenge now will be finding the right balance between protecting tenants without scaring off the property investors who provide most of the country’s rental housing. 

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