Rent increases: Do tenants have any rights?

Your landlord has just hit you with another rent rise. But this one isn’t just incremental, in keeping with inflation or the cost of living. It’s a jump of several hundred dollars a week. How are you going to afford it?

You’re not alone in feeling the pressures of ever-increasing rent. The Australian Bureau of Statistics reported a rise of almost 12 percent in rents since the start of 2022.

With the increasing cost of living and decreasing vacancies making moving difficult - that’s assuming you can find something more affordable - what can you do? Is such a big increase in rent even legal? How often can a landlord put up your rent? And what are your rights as a tenant?

Rising rents

Since 2020, the average Australian household’s rent burden has risen from 26.7 percent to 31 percent of their income, pushing 70 percent of the tenancy population into rental stress.

 

 

Rent prices in Australian capital cities have risen significantly in recent years. According to real estate data analytics provider CoreLogic, more than 80 percent of suburbs across the country recorded rent increases in the past year (2022-2023). Perth and Melbourne had the highest jump, at 13.4 percent and 11.1 percent respectively, as of December 2023. The average increase for houses and units across capital cities is about 9.8 percent.

While not as pronounced as in capital cities, rent prices in regional areas have also climbed. CoreLogic data shows a 4.3% rise in regional rents during 2023. But when compared to the 13.4% peak reached in August 2021, the former is a welcome slowdown.

The growth in rental rises can be attributed to

• • A shortage of available rental properties, driven by factors such as strong investor demand and reduced new listings, putting upward pressure on rents
  • Recent interest rate rises affecting investors, who might pass on some of the increased costs to tenants through higher rents
  • A rebound in immigration and returning students after COVID, contributing to a rise in rental demand and further tightening the already limited supply.

Potenial relief for renters

The good news is the pace of growth is expected to slow in 2024. According to the real estate analytics provider, there are three reasons for this.

First, there are potential interest rate cuts. If interest rates decline in 2024, this could increase investment activity and boost rental supply, potentially moderating rent growth.

Second is slower income growth. As income growth slows, some renters might downsize or seek more affordable locations, affecting demand in specific areas and impacting rent increases.

Finally, with rents already at high levels, further significant increases might become unsustainable, potentially leading to stabilisation or even slight decreases in some areas.

Understanding your rights

While rent increases are generally legal, it doesn’t mean you have no say. Part of your tenant rights is the ability to challenge unreasonable rises.

Here's a summary of the key points you should remember:

Frequency of rent increases

• • Nationally: Since July 1, 2023, landlords can only raise rent once every 12 months for existing and new tenancies. This applies to both fixed-term and periodic (month-to-month) agreements.
  • Exceptions: Specific rules may differ slightly in some states and territories. For example, the ACT limits rent increases to 10 percent above the Consumer Price Index (CPI) increase in any given year.

Notice period

• • Nationally: Your landlord must provide you with written notice of a rent increase, with the minimum notice period varying depending on your state or territory. The typical minimum is:
    • Sixty days in New South Wales, South Australia, Victoria, Tasmania, Western Australia and the ACT
    • Two months (around 60 days) in Queensland
    • Thirty days in the Northern Territory

Maximum rent increase

• • Nationally: There is no specific legal limit on the amount a landlord can increase the rent by in most of Australia. However, tenants can negotiate the proposed increase with their landlord.
  • Exception: As mentioned earlier, the ACT has a cap on rent increases tied to the CPI rise.

Renting rights across states and territories

State	Rent increase during fixed term agreement	Notice period	Increase frequency (periodic agreements)	Notice period (periodic agreements)	Maximum increase	Dispute resolution
Victoria	Only if allowed in the agreement, with calculation method specified	60 days	Once every 12 months	60 days	No limit	Victorian Civil and Administrative Tribunal (VCAT)
NSW	Only if allowed in the agreement for agreements under 2 years, with amount or calculation method specified	60 days	Once every 12 months	60 days	No limit	NSW Civil and Administrative Tribunal (NCAT)
Queensland	Only if allowed in the agreement, with calculation method specified	2 months	Once every 6 months (as of July 1, 2023)	2 months	No limit	Residential Tenancies Authority (RTA)
South Australia	Only if allowed in the agreement, with calculation method specified	60 days	Once every 12 months	60 days	No limit	South Australian Civil & Administrative Tribunal (SACAT)
Western Australia	Only if allowed in the agreement, with calculation method specified	60 days	Once every 6 months	60 days	No limit	Local Court
Tasmania	Only if allowed in the agreement (written or verbal)	60 days	Once every 12 months	60 days	No limit	Residential Tenancy Commissioner (RTC)
Northern Territory	Only if allowed in the agreement, with calculation method specified	30 days	Once every 6 months	30 days	No limit	NT Civil and Administrative Tribunal (NTCAT)
ACT	Only if allowed in the agreement, with calculation method specified	8 weeks	Once every 12 months	8 weeks	110% of CPI increase for rents in Canberra (unless challenged)	ACT Civil and Administrative Tribunal (ACAT)

What to do if your rent goes up

Check the legality

Familiarise yourself with the rent increase regulations in your state or territory (refer to the table above). This ensures your landlord is following the legal procedures, including proper notice period and frequency of increases.

Research the market

Look for similar properties in your area to understand the current market value. If the increase seems excessively high in comparison, this can help you negotiate or challenge the increase.

While specific limits on rent increases might not exist in most states, depending on your location, an argument can be made that the increase is unreasonable compared with similar properties and market conditions. This would typically involve seeking mediation or tribunal intervention from your state/territory's tenancy authority.

Check the fine print

If you haven’t looked at your lease agreement in a while, check whether it specifies how and when rent increases can occur. This can help determine if the proposed increase aligns with the agreed-upon terms.

Consider negotiation

Schedule a meeting with your landlord to discuss the proposed increase. Explain your concerns and present your research (market comparisons) on rental prices in your area.

 

 

If a decrease isn't possible, explore potential compromises such as a smaller increase or spreading the increase over time in exchange for a longer lease commitment.

Your landlord may be willing to compromise, particularly if you have been a tenant for some time. While they would make more money from a new tenant at the higher rate, they might be pragmatic about the fact they already have a good tenant and decide it’s not worth the risk of losing you.

Know your grounds

If your landlord hasn't followed the proper legal procedures, such as providing adequate notice or exceeding the allowed frequency of increases, you may have grounds to challenge the legality of the increase through official channels.

Disputing a rent increase

With rising rents putting pressure on many Australians, it's not surprising that disputes related to rent increases are also on the rise. According to The Guardian, Victorians alone lodged a record 5400 challenges to rent increases in the past 12 months, highlighting the growing concerns and efforts to manage these increases.

While not all challenges are successful, cases like one reported by Nine News, where a tenant successfully contested a significant rent rise through VCAT, demonstrate the potential for tenants to fight unfair increases.

If you believe your rent increase is illegal or unreasonable, you have the right to dispute it. Here's how:

• • Check your state or territory's tenancy laws and regulations. This will provide specific details on legal procedures, notice periods, and grounds for challenging a rent increase (eg: exceeding the allowed frequency or exceeding the market value).
  • Gather evidence. This might include the written notice of the rent increase, copies of your lease agreement, and any market research you've conducted on comparable rental prices in your area.
  • Contact your state or territory's tenancy authority. They can offer guidance, mediation services, and information on the dispute resolution process.

If mediation fails, you may file a formal complaint with the relevant tribunal in your state or territory.

The outcome of your dispute depends on various factors, including specific state/territory regulations, the evidence presented, and the strength of your arguments. While the increasing number of challenges suggests a growing awareness of tenants' rights, approach the process with realistic expectations and thorough preparation.

It isn’t easy for renters in Australia right now, but there are steps you can take if you feel your landlord is doing the wrong thing. If you’re not sure where to turn, get in touch with us, and we’ll help you handle it.