It's Time to Stop Stigmatising Renting in Australia

Originally published in The Age & Sydney Morning Herald (October 8 2024)

Aspiring to own your home has long been a cornerstone of our national identity. It is an idea deeply embedded in our cultural narrative—a symbol of success, security, and, most Aussies insist, a right. This belief, however, has come at a significant cost to a growing segment of our community. By holding onto the notion that home ownership is the ultimate marker of success, we have shaped a society and system that regards those who rent as a subclass. 

Approximately thirty-one per cent of Australian households rent their home, and this cohort is only, and will only, continue to increase in coming years. As a result, ensuring renters can access secure and affordable homes represents at least a third of the challenge of our current housing crisis. We know that solving this crisis requires complex and diverse solutions, but redefining our attitude to long-term and lifelong renting is essential if we are serious about fixing it. 

Whilst much has been made of Melbourne’s recent poor performance in property price growth, it remains the seventh least affordable housing market in the world (Sydney is second) considered “impossibly unaffordable”. Ross Gittins eloquently explains the structural issues contributing to seemingly insurmountable housing affordability problems in his The Age article, “Our unending housing crisis will never get fixed without a lot more thought and effort”. Gittins writes “we end up with a country divided between those born into the wealthy, home-owning class and those born into the class where generation after generation has never been able to afford to own the home they live in. Is that the Australia we want to live in?” Notionally, this may not be the Australia we want to live in, but it is the Australia we have, and that doesn’t have to be a problem.

Long-term renting is normalised in countries like Germany and Switzerland, and major cities like Paris and New York. Renters in those places enjoy secure housing, a strong sense of self-determination, and equal quality of life measures to those who own their homes. Numerous studies indicate that while homeowners can experience momentary joy around purchasing a home, they also tend to face higher stress levels and financial burdens, which can offset any perceived benefits. In fact, after controlling for income, housing quality, and health status, the differences in life satisfaction between homeowners and renters tend to disappear, suggesting that homeownership does not inherently improve happiness compared to renting.

For decades, the idea that every Australian should own a home has shaped housing policy and public discourse. Politicians and media outlets frequently reinforce this ideal, framing home ownership as the only legitimate path to security and success.  Renting is seen as a temporary phase, something people do while they save for a house deposit or wait for better economic conditions rather than a viable, even attractive, alternative to home ownership. As a result, our rental ecosystem has been shaped by a policy and attitudinal framework that has done little to encourage or support long-term renting. Renters are wary of asking for longer-term leases, fearing they will be discriminated against during the application process. Property investors have been conditioned to be suspicious of offering long-term leases out of fear of being tied to a poor-quality renter (which happens exceptionally rarely). Property managers feel powerless to advocate for long-term leases because of the concerns of renters and rental providers.

Politicians across the spectrum have failed to deliver policies that support property investors, renters, and real estate professionals in opening up the rental ecosystem to the growing population of lifelong renters and long-term property investors - two groups that naturally complement each other.

A simple solution is to offer residential leases that resemble commercial lease agreements more closely, with options for 3, 5, 10, 15, and even 20-year terms. These longer leases allow renters to enjoy the peace of mind and stability that comes with greater tenure, while investment property owners benefit from reduced vacancy and tenancy changeover costs. 

Renters would receive capped annual rent increases tied to the Consumer Price Index (CPI) and, in recognition of their longer-term commitment, could be offered rent-free periods based on the length of their lease. In exchange, they would take on greater responsibility for the upkeep of the property, fostering a sense of ownership and pride in their home throughout the lease term.

For investment property owners, the government should provide indexed land tax discounts that increase with the length of the lease, creating a direct financial incentive for property owners to offer longer tenancies.

If we are to improve the rental system in Australia, we must begin by challenging the cultural primacy of home ownership. Housing policy should not be shaped solely by the goal of getting more people onto the property ladder but by ensuring that everyone—whether they rent or own—has access to secure, affordable, and quality housing.

This starts with rethinking the way we talk about renting. Long-term renting needs to be recognised as a legitimate and respected choice, not a marker of failure or impermanence. Policy reforms are critical to making lifelong renting a viable option for more Australians, with longer leases, bi-directional responsibilities, and incentives for investors and renters to sign on.

If we want to create a fairer, more equitable housing system, we must stop thinking of renters as second-class citizens.