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It’s time to make renting fair and more affordable

The latest Rental Affordability Index released by National Shelter, Community Sector Banking and SGS Economics proves what we have long suspected: Melbourne’s rental marketing is increasingly unaffordable for more people.

According to the report, 12 Melbourne suburbs were classified as ‘severely unaffordable’, and a further 60 suburbs were classified as ‘unaffordable’, putting more people into housing stress.  To put this into perspective:

  • Your average hospitality worker forced to pay up to 60% of their household income toward rent in the 12 severely unaffordable suburbs and between 30-38% in the other 60 unaffordable suburbs.
  • A couple working full-time in minimum wage jobs faces paying in excess of 30% of their income toward rent in most Melbourne suburbs.


It is refreshing to see an official report bring this important data to light, but our leaders could have seen this coming.  Between the 2006 and 2016 censuses, the median rent in Victoria has increased by almost 78% while the median income has only increased by just over 38% over the same time period.  Year on year, we see more people from all walks of life being forced to move further away from the city in an effort to keep the cost of living at a manageable level.

What can be done?

There are many actions required to improve rental housing affordability.  In the meantime, the State Government can take action to help ease affordability issues within the rental market today by keeping their promise to legislate important changes to the Residential Tenancies Act:

Ban rental bidding. As competition increases – particularly for the few affordable properties that are left – the market is becoming rife with rental bidding.  Landlords and agents can encourage renters into a ‘bidding war’, and many tenants feel that they have no other choice but to make a higher bid in order to secure a property where they have job and family commitments.  The most common outcome of both scenarios is that tenants end up paying above and beyond their means and putting themselves into more financial stress.  This can be so easily avoided of landlords and agents are prevented from soliciting AND accepting rental bids.

Cap rental bonds. The current bond caps represent less than half of all rental properties in Victoria.  The State Government have promised to cap bonds at one month’s rent if the weekly rent is less than double the current median of $385, which would represent a much larger proportion of the state’s rented households.  Too many tenants are subjected to over-the-top bond payments, particularly when they’re new to the rental market.  When one month’s bond is more than adequate to cover any damage in the vast majority of cases, there is no reason why a tenant should be forced to pay thousands of dollars upfront in addition to rent.

Ban ‘no reason’ evictions. While this doesn’t have a direct financial effect on renters, it does play an important role in their financial security.  Moving house is expensive.  In addition to finding the money for the first month’s rent and bond payment, you also have to pay moving costs, you often have to take time away from work during the moving process, and moving causes a general disruption to your life and routine.  When tenants can be kicked out of their own homes for no reason, it is impossible to feel physically or financially secure.  The stress of being served a ‘no reason’ eviction notice aside, there’s virtually no way to budget for a new rent and bond payment when you can be evicted on a whim.

By keeping their promise to make renting fairer for all Victorian renters, the State Government will also be taking a modest first step toward making renting more affordable.