Victorian landlords are being urged to up rents while they can as the state works to provide better conditions for renters.
Melbourne renters are facing the prospect of paying almost $40,000 a year for a roof over their head by 2035, close to $10,000 more than is typical today.
But one of the nation’s most pre-eminent property investment groups is urging landlords to push rents even higher in a bid to recoup rising costs foisted upon them by the state government.
Rents are projected to become a battle ground between landlords and the government over the next decade as Victoria works to build enough homes to stop rental costs surging at the same time signs emerge property investors are exiting the state faster than they are buying into it.
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SQM Research founder Louis Christopher is forecasting a 2-4 per cent increase in rents across Australia’s capitals in the next year.
Mr Christopher said Melbourne might be lower, forecasting a 1-3 per cent increase for the Victorian capital as the state’s government had done more for tenants than other capitals at this point.
But the figures are not likely to hold at that level, and as more homes are built he said rents should fall back in line with their pre-pandemic trend of tracking near to 2.6 per cent in line with the Consumer Price Index.
This Tarneit home shows what you will get from Melbourne’s typical rental today, which was advertised at $585 a week in November, 2025.
In another decade’s time historic trends indicate the same address could cost $767 a week.
“It should get back to pre-Covid levels, and that will be reality in time,” Mr Christopher said.
Projected forward, the trend would raise rents for Melbourne’s typical home from $580 a week to $741, leaving tenants to find an extra $9400 a year to keep the roof over their head.
It would also lead to the number of suburbs where the typical home costs $1000 a week in rent surging from 25 today to more than 100 by 2035.
Mr Christopher advised most tenants should “seriously consider” buying a home if they could afford to. “Yes the market is going to pick up in the next year, and I think the way it’s gone for tenant’s who have turned into first-home buyers has been better over those who remained as tenants, and I don’t see that changing any time soon,” he said.
Property Investors Council of Australia chair Ben Kingsley is advising landlords to boost rental returns by 4-5 per cent as they try to recoup rising costs from the Victorian government “to get their investment back on an even keel”.
This Boronia demountable in a backyard is one of the few Melbourne homes available for $300 a week today. By 2035 it could cost almost $400.
Inside, the home offers budget accommodation.
“Where conditions are such that vacancy rates are low, we are encouraging our PICA members and all landlords to increase their rents by 4-5 per cent, while the land market conditions can accommodate it,” Mr Kingsley said.
“And if governments continue to increase taxes and increase the costs, we will go even higher to recommend 5-6 per cent.
“And we think that’s a very reasonable response to get a return on investment that we are not getting at the moment.”
PICA’s 2025 members survey attracted about 900 responses this year, with 65 per cent noting they had been able to pass on less than 10 per cent of the added costs they had faced in the past year — despite the majority of landlords surveyed having had cose increases above 11 per cent.
Not including interest, almost 270 indicated their costs had increased 11-20 per cent, while 160 encountered a 21-40 per cent increase in their costs.
At the upper end of Melbourne’s rental market, this Mt Waverley house was seeking $1500 a week in November, 2025. It’s projected to be closer to $2000 every seven days by 2035.
A two-bedroom St Kilda apartment can set you back $1500 a week today. In another ten years time, historic data suggests that figure will rise to $1965.
While increases would be hard to bear for tenants, Mr Kingsley warned over time if rents failed to keep up with costs for landlords, and yields dropped too low, a growing share would choose to sell and invest elsewhere — leading to fewer rental homes available.
“If the yield drops so low and you aren’t getting a capital growth return, then you will move on from that asset,” he said.
He pointed to Homes Victoria reports from the state’s Department of Families, Fairness and Housing, indicating the number of rental bonds have fallen across Victoria every quarter for the past 18 months as a sign landlords were fed up and selling.
A Victorian government spokesperson said the state was “leading the nation on renters’ rights” and that conflicting Consumer Affairs Victoria bonds data indicated the number of rental homes had risen from 732,125 to 736,352 across the past financial year.
However, it still remains below the 738,414 bonds held in the 2022-2023 financial year.
Priperty Investors Council of Australia chair Ben Kingsley is urging landlords to raise rents more, fearing that poor returns could lead to more selling and hitting the state’s rental supply.
Rental advocate and social media personality Jordan van den Lamb is hoping governments will intervene in the rental market in the nexe decade. Picture: Matt Hrkac.
This week they implemented further regulations including a ban on no-fault evictions and the final phase of a rental bidding ban intended to cement “Victoria as the best state in the nation for renters’ rights”.
The Victorian government has also set a target of building 800,000 homes by 2035, about 80,000 a year. It is currently short of that figure, with about 60,000 expected to be built across the state in 2025.
But socialist housing advocate and the man behind Australia’s shit rentals social media accounts Jordan van den Lamb said tenant households were struggling to survive, with many choosing between rent and food or medicine, and he feared increases “will be worse than the predictions”.
“You can see the household size for people who don’t own their home is increasing, so we are getting cramping of living spaces for renters as people have to rely on living with other people to be able to afford the place they rent,” he said.
Tenants Victoria chief executive Jennifer Beveridge said Victoria needed a “rent increase fairness formula” as while averages might indicate small stable increases, many tenants faced severe cases where rents rose 10, 20 or even 30 per cent.
This South Morang home is advertised for $800 a week, which could rise to $1048 a week.
“This isn’t about stopping small stable increases, but preventing the shock rent spikes that we have seen push people to the brink of homelessness,” Ms Beveridge said.
What history says your rent should be by 2035
$300 a week (2025) — $393 a week (2035)
$400 a week (2025) — $524 a week (2035)
$500 a week (2025) — $655 a week (2035)
Melbourne median house: $580 a week (2025) — $760 a week (2035)
$600 a week (2025) — $786 a week (2035)
$700 a week (2025) — $917 a week (2035)
$800 a week (2025) — $1048 a week (2035)
$900 a week (2025) — $1179 a week (2035)
$1000 a week (2025) — $1310 a week (2035)
This Moonee Ponds home is about what you get for $1000 a week in Melbourne today. That figure could be more than $300 higher by 2035.
$1200 a week (2025) — $1638 a week (2035)
$1500 a week (2025) — $1965 a week (2035)
Data reflects expected increase in rents if they continue to track historic trends in line with the 20-year average ConsumerPrice Index prior to the pandemic.
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