This study investigated the Australian private rental sector (PRS) focusing on institutional change, including formal rules (policies and regulation); organisations and structures; and informal rules (social norms and practices). It also reviewed the PRS in ten countries: Australia, Belgium, Canada, Germany, Ireland, New Zealand, Spain, Sweden, the United Kingdom and the United States.
The Australian private rental sector (PRS) grew by 38 per cent over the period 2006–2016, more than twice the rate of all household growth: on present policy and market settings, this growth is expected to continue in the future.
Growth in the PRS is not simply more of the same. The PRS has changed in a number of important ways since the mid-1990s:
- Increased debt-financing of PRS properties often involving intermediaries.
- Fragmentation of PRS provision with development of niche segments, a growing informal rental sector and a ‘supported housing’ sector; and
- Transformation of PRS access by uptake of digital technology ranging from large online property portals to social media use along with an increase in real estate management of PRS properties (75% of PRS properties nationally in 2016).
Comparing with other similar countries, Australia’s PRS stands out for:
- Its greater degree of integration with the wider housing system, particularly the owner-occupied sector, and greater reliance on the household sector (although this predominates everywhere) without the increase in large corporate landlords (LCLs) seen elsewhere; and
- The prominent role played by small business and franchised real estate agents in rental property management and the relative weakness of laws regarding tenants’ security and rents.
While the PRS houses a wide variety of households on a broad range of household incomes, low-income and vulnerable households face particular difficulties, including:
- Navigating through an increasing array of access points in the PRS, most requiring the capacity to use digital technology of different types; and
- Increasing exclusion from the mainstream PRS through technologies which can profile households, with resulting reliance on the largely unregulated informal rental sector.
Implications for policy include:
- Considering whether diversification of PRS financing and provision beyond the household sector would produce better outcomes for renters; and
- Developing standards and regulation where required for new types of digital technology used for PRS access and management.
"Together with the older forms of marginal housing such as residential parks and rooming houses, 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-forprofit organisations, and a growing informal sector." — Dr Chris Martin, UNSW Sydney.