Renters, once ignored by politicians, are shaping up as a growing force in Australian politics as the dream of home ownership falters and more families consider renting as a long-term option.
The national figures tell the story of a growing renter cohort: the 2016 census shows 30.9 % of households are renting, up from 29.6% five years earlier.
But these figures understate what’s really happening in the major cities of Sydney and Melbourne, where soaring house prices are turning the dream of owning a home into an illusion for many.
Instead, many Australian households are contemplating a long-term future as tenants – or their children are – and with that the dramas of renting, once confined to the poor or young, are now part of many peoples’ lives, either directly or through their kids.
Families from all walks of life are becoming familiar with tales of mouldy houses; recalcitrant landlords who won’t do basic repairs; having to move several times – or the threat of it, making the person too fearful to ask for repairs.
That in turn is causing politicians to consider reform of rental laws and possibly a rethink of tax policy, which helps shape the Australian rental market.
The data show that in many areas of Sydney, more than half of the households are renting. Melbourne is not far behind and it’s not just in the traditional rental areas of the inner ring suburbs.
There are now high numbers of rentals in suburbs that were once regarded as home owner heartland – and many of them overlap with marginal seats.
Take for example Parramatta, in Sydney’s west. Nearly two-thirds of households live in rental accommodation. The suburb, once dominated by quarter-acre blocks, has been transformed as it develops into Sydney’s second CBD.
In Melbourne a similar pattern is emerging. As well as traditional areas such as St Kilda, the high levels of renting are spreading to the suburbs. In Dandenong it’s now 50% of households, in Hawthorn 48% and Box Hill 42%.
Many of the these areas of high rentals overlap with marginal seats, both at state and federal level.
For example, in Strathfield, a hotly contested NSW state seat held by Labor by just 1.8%, renters make up 40% . In Sydney’s west, the state seat of Penrith is held by the government by 6.8% but is regarded as marginal, while the federal seat of Lindsay, also centred on Penrith is held by Labor by just 1.12%. Renters make up 50% of households.
In Melbourne the federal seat of Chisholm and the state seat of Box Hill have changed hands several times in the past two decades. The proportion of renters is now 42% of households.
For the first time in decades, political parties are rethinking the rights of tenants versus landlords, amid widespread evidence that tenants get a pretty raw deal in Australia.
In Germany, Netherlands, Scandinavia and even the US, where renting for life is a common occurrence, the law acknowledges that rental properties are also homes and that security of tenure is paramount.
In Germany, where 60% of people rent, tenants can have indefinite leases, and even for fixed leases it’s difficult for leases to be terminated without the tenants’ permission.
In contrast, in all jurisdictions in Australia tenancies can be ended without grounds at the end of a fixed term, which can be a short as six months. In the case of periodic leases – and 20% of tenants are on these – landlords can also end them without cause.
In NSW, the Berejiklian government is working on a suite of measures to be announced in the new year.
“The government has committed to stronger protections for victims of domestic violence, fairer lease-break fees for tenants, strengthening their rights to get repairs done, introducing better disclosure requirements prior to a tenant signing a lease, and increased protections for tenants regarding photos and videos of the interior of their rental properties,” the minister for innovation and better regulation, Matt Kean said.
“We are also consulting on a range of other options and will continue to engage with stakeholders.
The NSW opposition is already come out with a comprehensive plan that includes longer tenancies, with 12 months as a minimum; an end to no-fault evictions; and limiting rent reviews to once a year.
“If you are a good landlord, there there is no reason to fear the changes we are proposing” the opposition spokeswoman, Yasmin Catley, said.
Last month, Daniel Andrews’s Labor government in Victoria unveiled a major overhaul of the Residential Tenancies Act, designed to tip the playing field in the renter’s favour. It’s due to be brought into law in 2018.
The bill includes allowing people to stay on longer leases, measures to cap bonds to one month when rents are less than $760 a week, and stamping out the practice of agents encouraging “rental bidding”.
But there are other quality of life reforms as well. The Victorian laws make it easier for renters to have pets. They still need the owner’s permission but landlords are banned from automatically including a no pets clause and there will be an appeal process if landlords refuse to allow a pet. However, pets can still be prohibited if the owners’ corporation has a ban on pets in the unit block.
There’s also a name and shame element to the Victorian reforms, which include creating a a publicly available blacklist of landlords and estate agents who have been found in breach of rental laws, or have had action taken against them.
Exactly how successful these changes will be is a matter of hot debate – for example there’s nothing to stop a tenant offering more rent than advertised as long as it’s not solicited – but tenants’ advocates agree they are a step in the right direction.
“No-cause eviction is still the main problem,” says Adrian Pisasrski, of National Shelter. “Even if you have a list of acceptable reasons, people should be allowed to stay, for instance when a house is sold.”
Rental reform has also been flagged in Queensland by the Labor government, though this will obviously depend on whether Annastacia Palaszczuk wins a second term.
Not everyone is happy. The Real Estate Institute of Victoria has criticised that state’s reforms, though so far the insitute has been quiet in NSW.
But there has been at least one outspoken critic: the state’s biggest landlord, Meriton’s Harry Triguboff.
Triguboff has over 3,000 rental apartments in his portfolio as part of his strategy of hanging onto about half the units in the apartment blocks Meriton develops. He also manages about 3,000 more for private investors, making him Sydney’s biggest landlord.
“I will sell all the rental properties, which I will vacate and I will not build any new ones,” Triguboff told the Australian last month after both sides of politics flagged changes.
“If I don’t get the answers [about any policy impact on investors], I will not renew any lease.”
Perhaps it was hyperbole. Liquidating such a large portfolio would have its own risks and many of the units might well end up in the hands of investors who would rent them anyway.
But others in the property sector are more sanguine about a shift that would make renting a more stable option. The Property Council of Australia is actively promoting the option of building apartment blocks specifically for long-term rentals – possibly in conjunction with some tax breaks or rental subsidies directed towards affordable housing.
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Tomorrow: Build to rent : the answer to Sydney’s housing future?
