Queensland tenants will only see their rent raised once a year under a state government proposal to curb some of the nation's steepest increases.
More than one million Sunshine State renters "must be given a fair go" to pay rent they can afford, Premier Annastacia Palaszczuk told parliament on Tuesday in announcing the switch from increases every six months.
"The great majority of landlords do the right thing and look after their tenants, for those who don't, this is a wake-up call," she said.
The change will bring Queensland into line with limits on the frequency of rent hikes in NSW, Victoria, Tasmania, the ACT and SA.
There's a six-month limit in WA and also in the Northern Territory, but only if increases are written into a lease agreement.
Rents have grown faster in Queensland than any other state or territory with low-income and regional households hit the hardest, according to a recent Queensland Council of Social Service report.
The Labor government has stopped short of imposing limits on the size of rent hikes, like rules in the ACT, despite many Queensland social service organisations calling for restricting increases to match inflation.
QCOSS chief executive Aimee McVeigh backed the cap, but she said it doesn't go far enough because it will not prevent price gouging.
"We simply don't have enough houses to house all of the people in this state, and so of course when you've got a simple story of supply and demand we are going to continue to see rent inflation, the price of rent increasing, unless we have some regulations," she told reporters.
Tenants Queensland said if the size of the rental increases is not limited, landlords will simply use the end of fixed-term leases as a proxy to hike rent.
"It would be a fair playing field to limit those increases to the amount of CPI on an annual basis that provides returns to investors and at the same time it's giving stability and predictability for renters," Tenants Queensland chief executive Penny Carr said.
However, the rent controls have been panned by the real estate sector and the opposition Liberal National Party.
Real Estate Institute Queensland chief executive Antonia Mercorella said the rent cap had caught the sector by surprise after the government gave assurances it wasn't going to happen.
"It is disappointing. We know that each time this happens investor confidence is dented that little bit more," she told reporters.
"Again, we'd like to be focused on supply."
The government is also hoping to entice developers to construct more build-to-rent housing projects through a series of tax concessions, including a 50 per cent discount on land tax payable for up to 20 years.
The residential buildings that favour long-term rentals will be eligible if they meet criteria including at least 10 per cent of dwellings being affordable housing.
Ms Mercorella welcomed those plans while calling on the government to make it easier for developers to build residential apartment blocks.
"We know that it's a more efficient way of getting a larger group of tenants or owner-occupiers housed, and I think the community is ready for that," she said.
"I think Queensland has been reluctant to embrace apartment or unit living, but I think as a community we understand that we are in a housing crisis and that we need to adapt and change."
The state government also flagged that a second stage of rental reforms was being considered at its housing roundtable on Tuesday.
