With almost a third of households now renting, a spotlight has been thrown upon the poor conditions in many parts of Australia’s rental market: short tenures, an absence of quality standards, sudden unpredictable spikes in rental prices and a lack of affordable properties are pushing too many Australians into housing stress and putting them at risk of homelessness.

This paper seeks to shed some light on a heated debate. It examines the data to establish if there is, indeed, a rental crisis in Australia, and surveys local and international research to determine what would work to improve the experience of renting a home in the Australian market.

The authors find that, despite the increasingly rancorous political debate, there is no evidence of a rental price crisis at the market median: that is, the rents being paid by middle and higher income households as a proportion of their income is roughly consistent with the historical average.

What is undeniable, and not news to anyone working in housing and homelessness services across the country, is that there is a genuine crisis for low-income households in Australia’s rental market, one that has been brewing for over 20 years. While the average proportion of income paid as rent by middle-income households is around 30%, the definition by which that threshold denotes rental stress applies only to households in the bottom 40% of income distribution: and they are paying more than half of their income just to put a roof over their heads.

The research contains some surprising findings: there is not, for example, an aggregate lack of supply in the housing market. Australia builds more homes per capita annually than do most comparable developed countries. There is plenty of market-rate housing available across the country; the problem is a severe and compounding lack of quality social and affordable housing for those at the bottom of the income scale. The authors also find that a first generation rent control, or a 'rent freeze', would be a poor response to the real challenges facing Australia’s housing system, almost certainly making the problem worse for those in real housing stress.