There is a growing push for rental caps — or even a freeze on increases entirely — as the housing crunch continues, however, despite it being a "viable" short-term solution, some analysts fear the policy could negatively affect both investors and tenants.
On Tuesday night, the federal government announced a 15 per cent increase to the maximum rate of the Commonwealth Rent Assistance program — up to $31 a fortnight — from September as part of its budget.
The government described it as the largest increase to the program in more than three decades, and said it would help more than a million low-income Australians manage the rising cost of living.
Jacob Harrison — who works three jobs to make ends meet while studying full time — will receive the increased payment.
He shares a house with two other people, but is worried the increased rental assistance payment — which, he says, is equivalent to "four cups of coffee" — will prompt a rent hike from his landlord.
"We had an inspection last week and it went pretty well, but they'll find repairs and things that need doing, and it's also an opportunity to raise [the] rent," Mr Harrison said.
"We've had a rental assistance increase. They may see that as justification to raise it by just that much.
"I know it's a little cynical of me to believe that but, you know, … there's nothing to stop them."
Ashley Ognenovski received her first-ever rental hike a month ago, but was relieved it was only $40 per week.
"I know a lot of people have been getting extreme and disproportionate rental increases," she said.
However, she is also worried that, should she need to ask for repairs to be made to her home, her landlord could increase the rent again at the next renewal.
"All the power is in the landlord's hand," she said.
"Landlords can, and they do have, the power to increase it by so much. And, really, the tenants have no control over that.
"We need rental caps. We need intervention right now."
Jurisdictions across Australia limit the number of times landlords can raise rents within a lease's lifetime but only one has control of how much that rent can go up.
With vacancy rates so low, economists say renters who get a rental increase upon renewal have little option but to bear the cost or go elsewhere.
"Very tight rental markets right now mean that any additional income supplements could actually be passed through to higher rents," CoreLogic economist Eliza Owen said.
"There's not a lot of limit on how much landlords can increase their rent by and, at the moment, landlords have a lot of power."
Is a rental freeze the answer?
The Greens want to see a rental freeze introduced for two years to give renters certainty amid rising inflation and living costs, followed by rental increases being capped at 2 per cent a year.
"This is the worst housing crisis in Australia's history since World War II and we need to take it seriously," Greens housing spokesperson Max Chandler-Mather said.
"There are millions of people right across Australia [who are] one rent increase away from eviction. [There is] nothing to stop that from happening."
Ms Owen said that, while the increase in rental assistance was welcome, the measure did not get to the heart of the problem.
"We're seeing very low levels of supply, including vacancy rates hovering around 1 per cent," she said.
"Even though we've seen this supplement, which could increase fortnightly assistance by $31, average rents have increased by about $113 in the past year alone.
"So it doesn't go a long way in terms of helping to cope with rising rental costs."
Joey Maloney from the Grattan Institute says there is a case to limit how much rents can increase by in the current economic climate.
"There is a case for thinking carefully about how we limit really extreme rent rises that are well above what the market is dictating right now," he said.
"But I do think that there are big risks with a rent freeze that need to be thought carefully about before we push ahead with such a policy."
The economist argues there could be an adverse side effect to rental control.
"It reduces people's propensity to move. And what that means, over time, is that people end up staying in housing that doesn't suit their needs," Mr Maloney said.
"It means that if no-one else is moving, there's not a flow of new housing for you to move into. So it increases the risk of homelessness."
Unfortunately, he argued, supply and demand might be needed to consolidate renters in bigger households, especially given a shortfall of housing stock has been predicted for years to come.
Landlord says rental freeze would leave tenants worse off
Figures from the Australian Tax Office suggest about one-in-seven adults own an investment property.
Scott Levoune owns 10 rental properties and has increased the rent he charges his tenants, but says (the increases) have all been below market value.
"Generally, with our tenants, we do anywhere from $10 to $20 under market value, which gives them that tiny bit of relief," he said.
"But it's a big loss to us, also, but a good tenant is worth everything."
Mr Levoune recently increased the rent for one tenant who is on a two-year contract, increasing the weekly rent from their previous locked-in rate of under $240 to between $330 and $340.
He said the increase was justified, because the property needed to produce "positive cash flow" to fund repairs.
"If a tenant does need repairs, I need to be able to afford the repairs to actually help the tenant and make sure that they live comfortably," he said.
"I believe people have forgotten that rents haven't increased in many, many years."
The property mogul says the Greens policy suggestion of a national rental freeze and future rental price caps would negatively affect tenants.
"What investors are going to do is find reasons to remove tenants from the property and then put it up to market rate," Mr Levoune said.
"[Landlords are] going to remove the tenant out of the property. They're going to increase the rent where it's going to go to, which means every year there's going to be more tenants looking for properties."
Mr Levoune said any freeze on rental increases would be heavily contested by landlords.
"We need ways to encourage investors, not discourage investors," he said.
"If they're going to do a rent freeze, a lot of investors — and especially mum-and-dad investors — they're going to lose their properties."
Could price caps be a solution?
Ms Owen believes rental caps are a "viable short-term solution", but they should not be considered a permanent fix.
"Long-term rental caps are not a popular option, and they might not be advantageous for delivering more supply," Ms Owen said.
"But, in the short term, it could be a solution to protect some of the most-vulnerable households."
Cameron Murray — a housing economist at the University of Sydney — said introducing price caps more widely where rental increases were tied to the inflation rate should be seriously considered.
"The ACT is the only place in Australia that has a limit on how quickly [rents] can be increased, and that limit is the CPI times 1.1," he said.
"If the CPI is 5 per cent, you can increase the rent each year on a tenant 5.5 per cent."
Other jurisdictions are subject to market pricing, where rents can increase as quickly as the market changes.
"This is a real estate issue, because rental regulations are state-level laws, so the Residential Tenancies Act and similar laws," he said.
"Queensland debated potentially regulating how quickly rents can go up just a month ago and decided against it.
"Instead, they limited the number of rent increases to one per year, instead of two per year, but not how quickly that rent can go up."
Mr Murray listed Germany and the Netherlands as examples of countries with effective rent-control policies.
"The political calculation, at the end of the day, comes down to: 'Are the 17 per cent of people who are landlords more important than the 33 per cent who are renters'," Mr Murray explained.
"That's the political trade-off that we're facing, and why it's so difficult to get any action at the moment."
Mr Murray views rental control as being similar to smoothing out "sudden changes" in the rental market.
"That's obviously very good for tenants to help them budget and not be surprised after 12 months that their rents going up 20 per cent, or some enormous figure like that," he said.
Mr Harrison is hopeful something will be done soon.
"We've had welfare for the wealthy for so long. It's about time that we just try and even things out a little bit," Mr Harrison said.
"I'm not talking socialism. I'm just talking, like, common sense."
