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The president of the Real Estate Institute of Victoria (REIV) has argued that Australia’s residential rental market would be improved if landlords were more open to long-term leases.
In an opinion piece first run by the Sydney Morning Herald, REIV president Jacob Caine has made the case for longer term residential leases being offered by rental providers across the country as a way to improve conditions for renters as well as the health of the housing market. The piece lands just as the real estate veteran settles into another year as head of the board at the Victorian industry association, having been re-elected president for a second term.
Titled I’m a real estate agent, and even I think renters should have 20-year leases, Caine sets out some of the challenges that have emerged from Australians’ prioritisation of home ownership over renting.
“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,” he said.
But Caine believes that this ethos has come at a significant cost to a growing segment of the Australian community, by shaping a society that regards those who rent as a subclass.
It’s not the case in countries such as Germany and Sweden and major cities like Paris and New York, he observed. “Many renters there enjoy secure housing and equal quality of life measures to home owners,” Caine said.
Moreover, he cited studies indicating that ultimately home ownership does not actually materially contribute to a great quality of life, it’s rather the stability of housing that makes the difference.
In Caine’s view, much of the stress and stigma associated with renting would be alleviated if landlords and rental professionals in Australia were more open to long term leases – to the duration of five, 10, 15, and even 20 years.
“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,” he said.
“Renters would receive capped annual rent increases tied to the consumer price index 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,” Caine furthered.
Under this model, he advocated for governments to provide indexed land tax discounts for investment property owners that increase with the length of a lease, to create a financial incentive for property owners to offer longer tenancies.
He noted that the existing state-by-state conditions and protections of residential leases would continue under long-term leases.
What is required to make this change, he argued, is challenging some of the fears that stop the practice of long-term leasing from becoming commonplace.
“In Australia, 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 longer leases out of fear of being tied to a poor-quality renter (which happens exceptionally rarely). And property managers feel powerless to advocate for long-term leases because of the concerns of renters and rental providers,” he said.
Policymakers have contributed to the issue by failing to deliver policies that support investors, renters and real estate professionals in “opening up the rental ecosystem to the growing population of lifelong renters and long-term investors – two groups that naturally complement each other,” Caine argued.
In his eyes, it’s time Australia challenged “the cultural primacy of home ownership”.
“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, bidirectional responsibilities, and incentives for investors and renters to sign on,” he said.
ABOUT THE AUTHOR
Juliet Helmke
Based in Sydney, Juliet Helmke has a broad range of reporting and editorial experience across the areas of business, technology, entertainment and the arts. She was formerly Senior Editor at The New York Observer.
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