Masterclass: A History of Renting in Australia
I’m a long-time Australian renter, and I’ve seen how renting in Australia has changed over the years. Looking back, it’s clear that renting today is a very different experience than it was decades ago. In this post, I want to share a brief history of renting in Australia from the 1970s to now. We’ll travel through time to see how the rental market evolved – touching on how supply and demand shifted, what it cost to rent, and how government decisions shaped renters’ lives. By the end, you’ll understand the key trends that have led to the current state of renting. Let’s start our journey in the 1970s, when the rental scene was simpler and a bit more affordable.
Table of Contents
The Early Years: Renting in the 1970s and 1980s
Changes in the 1990s and 2000s
The 2010s: Generation Rent
Tying It All Together
The Early Years: Renting in the 1970s and 1980s
In the 1970s, Australia was a nation of homeowners in the making – but plenty of people rented their homes too. Back then, around 30% of households were renters, not far off from today’s figure. However, the nature of renting was a bit different. A significant portion of renters lived in government-provided housing (often called “Housing Commission” homes). The federal and state governments were building lots of public housing in the post-war decades. If you had a low income or a big family, you might score a solid brick house in a suburban estate at a subsidised rent. Those homes were meant to give working-class families a step up. At its peak in the mid-20th century, public housing made up a notable chunk of all housing. For example, entire suburbs in cities like Melbourne and Sydney – think of places with rows of similar-looking houses built by the Housing Commission – were dedicated to these affordable rentals.
For those renting privately, the market in the 70s and early 80s was relatively straightforward. Many landlords were small-scale (maybe a local family that owned an extra house). Rents were generally modest, and because home prices were much lower (relative to income) than today, being a landlord wasn’t a massive profit-making scheme – it was often a sideline. If you rented, you typically did so for a short period before buying your own place. Home ownership was rising, and the Australian dream was to purchase a house as soon as you could. Indeed, home ownership rates peaked around 70% in the 1960s-70s, meaning fewer long-term renters.
During the late 1970s, inflation was high across the economy, and rents did go up, but wages were rising too. Many tenancy laws were still old-fashioned: leases could be short and tenants didn’t have a lot of rights. In some states there were rent control laws left from wartime, but they were phasing out. This was a time when a landlord could ask you to leave with not much notice, and tenants didn’t have formal protections like we see developing later. Even so, because there was generally enough housing and public housing as a fallback, renting didn’t feel as pressured as it can now.
The 1980s brought some changes. Australia’s economy opened up and boomed early in the decade, and home prices started climbing quickly. As buying a home grew more expensive, renting became a longer reality for some. In 1985, the federal government made a bold policy move: it removed a tax break called negative gearing (which had let landlords deduct losses on their rental property to reduce their tax). Some landlords panicked, and by the late 1980s there were reports of rents jumping in cities like Sydney. In fact, in parts of Sydney there was a tight rental shortage at that time, and without that tax incentive some investors had pulled back. The government reversed the decision after two years, bringing negative gearing back in 1987. This little drama is still talked about today as an example of how sensitive Australia’s rental market can be to policy changes.
By the end of the 1980s, renting was getting tougher in some ways. Vacancy rates (the share of rental properties empty at any time) dropped in the big cities – meaning more competition for each rental. Also, the government started building less public housing than before. Instead, they began giving eligible low-income renters a payment (Commonwealth Rent Assistance) to help pay for private rentals. So, more low-income families were now renting from private landlords, sometimes struggling to find affordable places. The 80s were a turning point: homeownership was still the dominant goal, but cracks in the affordability of that dream were appearing, and renting was becoming the long-term situation for a segment of Australians.
Changes in the 1990s and 2000s
The 1990s started with a bang – or rather, a bust. Australia had a recession in the early 90s, and interest rates soared, causing some upheaval in housing. A lot of people couldn’t afford their mortgages and had to sell, and for renters, it was a mixed bag: some found rents a bit cheaper or negotiable in the early 90s because the economy was slow. However, as the decade progressed, Australia’s population grew steadily (especially with increased immigration by the late 90s) and the economy recovered. Homeownership rates stopped rising and actually started to slip for younger people. By 1999-2000, about 27% of households were renting (with around 20% renting privately and 6% in public housing). Public housing’s share was dropping because governments weren’t expanding it (in fact, they were selling some or transferring some to non-profits).
In the 90s, renting for many felt reasonably stable month-to-month, but the long-term prospect of buying a house was getting harder. House prices in places like Sydney took off in the late 90s. More people in their 20s and 30s found they had to rent for longer while saving up. Fortunately, the actual rent levels in the 90s were not skyrocketing – they moved mostly in line with inflation, with some local spikes. Landlords still were mostly individuals, but by the late 90s a new trend emerged: property investment became more popular as interest rates stabilised at lower levels. Mom-and-dad investors started buying second properties more for capital gain (the profit when selling) than for rental yield. This set the stage for the 2000s, where investors would play an even bigger role.
Enter the 2000s, an era of property booms and growing rental demand. The decade opened with the year 2000 bringing the GST (a new tax) and as compensation, the government gave First Home Owner Grants. This actually fueled a housing boom in 2001-2004, especially in Sydney, where home prices and thus rents climbed rapidly. Suddenly being a landlord seemed quite lucrative, and you saw a big increase in everyday Australians buying investment properties (often using interest-only loans and negative gearing to make it viable). Investors flooded the market – by 2007, roughly 1 in 3 dollars lent for housing was going to investors, not people buying a home to live in.
For renters, the mid-2000s were challenging. The population was growing quickly (thanks in part to a mining-fuelled economic surge and migration). But new housing construction wasn’t keeping up, and almost no new social housing was being built either. Vacancy rates in rentals went under 2% in many cities – which is really low. I remember watching the news about searching for apartments in 2006 with applicants having to line up with dozens of others at inspections. Rents were rising fast; in fact 2007-2008 saw rents nationwide rise ~7-8% in a year, the fastest in decades. Media stories talked about “rental wars” – tenants offering above asking rent or a lump sum up front to secure a place.
There were some government responses. In 2008-09, during the Global Financial Crisis, the Rudd government launched the National Rental Affordability Scheme (NRAS) which gave incentives to investors to provide below-market rent homes. It was an interesting idea and did create tens of thousands of cheaper rental units, but it had a limited time frame and was eventually phased out. Also, as an emergency measure, the government temporarily doubled the First Home Owners Grant, which ironically pulled some renters out to buy but also kept home prices high. By the late 2000s, renting had transformed: it was no longer just students and young couples, but also families with kids and even an increasing number of older adults. The term “Generation Rent” started cropping up to describe people who may never afford to buy if things continue.
One more notable change in the 2000s was the beginning of tenancy law reform. States started looking at giving tenants a bit more security (for example, by the end of the decade, most states had rules that landlords can’t kick you out without a reason during a fixed lease and had to give proper notice for rent hikes). Bond lodgment schemes (where your deposit is held by a third party) became standard. These were positive steps but didn’t radically shift power; they just modernised an aging system. So by 2010, we had more people renting than in 1990, for longer in their lives, spending more of their income on it, and feeling less certain they could ever buy. Renting was changing from a brief chapter to a long saga for many Australians.
The 2010s: Generation Rent
The 2010s truly saw the rise of “Generation Rent.” Coming into this decade, housing prices had surged, dipped during a small post-GFC lull, then surged again mid-decade. For those who already owned homes, great – their wealth grew. For those who didn’t, it meant years more saving or possibly giving up on owning altogether. By the mid-2010s, home ownership among 25–34 year-olds had fallen significantly compared to their parents at the same age. They were renting instead. This meant the renter population now included more middle-class and dual-income households who in an earlier era might have bought a starter home. The profile of renters was diversifying: not only young singles, but also professionals, families with children, and more seniors as well.
What was renting like in the 2010s? It depended where you were. In the big cities, rents remained high and generally kept climbing, though not as sharply as the mid-2000s. There was actually a boom in apartment construction around 2013-2017 – especially high-rise apartments in Melbourne, Sydney, and Brisbane. This added a lot of new rental stock (often purchased by investors to rent out). For a while in the late 2010s, inner-city renters had more choice and some bargaining power (I remember around 2016, some landlords offering a free week’s rent to entice tenants in Melbourne’s CBD because so many new units were available). So, in certain segments, things improved a tad or at least stabilised. But in popular suburbs, especially with houses suitable for families, rents kept going up. By 2019, renting a typical house in Sydney or Melbourne was really pricey – often well over $500 a week, which is a lot of money out of monthly take-home pay. Renters on lower incomes in those cities often had to look farther out or in smaller towns.
The affordability crunch for low-income renters reached new heights in the 2010s. Each year, charities like Anglicare put out reports on how few rentals were affordable for people on welfare or even on minimum wage – and the numbers became almost zero in major cities. We also saw homelessness increase, partially linked to the housing squeeze. Government housing waiting lists grew longer. In short, the safety nets were fraying while the private rental market took on more and more people.
On the policy front, late in the 2010s we did see some significant tenancy law changes. For instance, Victoria passed a big overhaul of rental laws in 2018 (commencing in 2021) that, among other things, banned no-cause evictions and allowed tenants to make minor changes to a property (like put up hooks or have a pet) by default. Other states like New South Wales and Queensland also strengthened tenants’ rights in areas like minimum property standards and longer notice periods. These changes were driven by the recognition that renting is not just a short stopgap for people – it’s become a long-term housing solution and therefore needs to be more secure and livable. It was a cultural shift: public discourse began to acknowledge that not everyone will own a home and that shouldn’t doom them to instability.
Another trend was the growth of the build-to-rent concept in Australia. By the late 2010s, some developers and financiers were seriously exploring building apartment blocks that would be retained by a company and rented out (common in the US and Europe, but new to Australia where traditionally developers sell units one by one). The government started to tweak some taxes to encourage this, seeing it as a way to get more professional rental supply. Still, it was in its infancy by 2019.
So, by the end of the 2010s, we had a rental sector larger and more diverse than ever, but also under strain. Many more people were renting not by choice but by necessity. There were improvements in tenant rights on paper, but the fundamental challenge was affordability. If you were a middle-income renter, you might have managed okay aside from frustration at not being able to buy. But if you were a low-income renter, chances are you were in rental stress (paying more than 30% of your income in rent) – in fact, about half of low-income renters were in that boat. The stage was set for the 2020s, which – as we’re now living – brought its own upheaval with the pandemic and a full-blown rental crisis.
Tying It All Together
From the 1970s to today, the story of renting in Australia has been one of transformation. We went from a time when renting was often a stepping stone to home ownership, with a solid government housing program in the mix, to an era where renting is a long-term reality for millions, and the market is largely run by private investors. Over 50 years, home ownership rates plateaued and even dipped for younger generations, meaning more people stayed in rentals. Government policies, like tax incentives for landlords and reduced investment in public housing, shaped these outcomes in big ways. The demographic and economic shifts – population growth, smaller households, rising living standards – kept upping the demand for rentals.
This history helps explain why we now talk about a “rental crisis.” It didn’t come out of nowhere; it built up over decades. Renting has become less affordable and less secure than it should be for many Australians. The brief journey we took shows key moments: the 1980s tax changes, the 2000s boom, the 2010s generational shift. Understanding those helps point to solutions. If we know what changed and why, we have a better idea of what we might need to change now to make renting work better.
As someone who’s been a renter through some of these changes, I can say the experience today – with intense competition and high rents – is worlds apart from the more laid-back renting of the past. My hope is that by learning from this history, we can create a future where renting in Australia is affordable, secure, and respected as a valid choice, not just a fallback. The history of renting is still being written, and with the lessons of the last 50 years in mind, we can aim for a better chapter ahead.
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