Australia’s rental shortage is tightening as instability fuels churn, with new snap-poll research and property managers warning short leases are worsening supply pressure.
Australia’s rental crisis is no longer just driving up rents, with growing instability now worsening shortages and fuelling churn across the market.
Property managers warn uncertainty is pushing landlords to hesitate, sell or avoid longer-term leases, while renters are forced into repeat moves that intensify competition.
New snap-poll research collected late last year confirms instability, not rent levels, is now the dominant pressure shaping behaviour across the rental market.
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The SNAP POLL Sentiment Report, commissioned by housing model EqiHome Way, surveyed more than 600 renters and residential property investors across Victoria and Queensland in late 2025.
Renters and landlords both ranked certainty above affordability or return, warning short-term leases and last-minute decisions were fuelling churn and worsening the shortage.
PropTrack data shows just how sensitive rental supply has become, with more than 90 per cent of investment properties sold in the past year selling for more than their previous purchase price, one of the highest shares on record.
Place New Farm head of property management Vita Little says rental instability is driving churn, tightening supply and worsening Australia’s rental shortage.
Place New Farm head of property management Vita Little said eroding certainty had become one of the biggest threats to rental supply.
“When you remove stability from the system, you get churn, and churn is the enemy of supply,” Ms Little said.
Renters said short-term lease cycles were forcing repeated moves, often with little notice, tightening an already competitive market.
One renter said the fear of having to move again had stopped them applying for jobs in different areas, while others delayed major life decisions because they could not rely on staying in the same home.
Several renters told NewsCorp Australia they treated a 12-month lease as just nine months of security, with renewal decisions often coming too late to plan.
How rental instability worsens the shortage: short leases drive churn, churn forces repeat moves, and repeat moves intensify competition for scarce rentals. Picture: Google Gemini
On the other side of the market, investors said instability was influencing whether they stayed in residential property.
While rent increases have drawn political attention, investors responding to the poll said unpredictability around costs, regulation and lease conditions was the bigger concern.
Ms Little said the pressure was reshaping behaviour across rent rolls, increasing turnover even when both sides wanted stability.
“We’re seeing people move more often than they want to,” she said.
“Every time a property turns over, it tightens the market.”
She said the impact was not limited to renters.
“Landlords are hesitating too,” Ms Little said.
PropTrack data shows more than 90pc of investment property resales sold for more than purchase price in the past year, as Australia’s rental shortage worsens.
“Some are delaying decisions. Some are questioning whether to stay in the market. That all feeds into supply.”
Ms Little said property managers were now spending more time mediating stress and explaining rule changes than managing homes.
“A large part of what we do now is education,” she said.
“Explaining legislative change, what owners can and can’t do, and what that means for tenants.”
She said affordability pressure was compounding instability, with traditional benchmarks no longer reflecting reality.
“The old 30 per cent of income rule is basically gone,” Ms Little said.
“Around 80 per cent of applicants we’re seeing are spending 40 to 50 per cent of their income on rent.”
“That creates vulnerability,” she said.
“And vulnerability leads to churn.”
Choice Property Group director Louisiana Guimelli says most landlords want long-term tenants, but shifting rules and rising costs are making longer leases harder to commit to.
Choice Property Group director Louisiana Guimelli said public debate often misunderstood who landlords actually were, masking pressures influencing supply.
“There’s this idea that landlords are all cashed-up investors, that’s just not the reality.”” Ms Guimelli said.
“Many are mum-and-dad owners, some inherited properties.
“Others are renting out former family homes because life circumstances changed.”
Ms Guimelli said most landlords wanted long-term tenants, with turnover costly and disruptive.
“Turnover is expensive, vacancy periods, advertising and reletting fees all add up,” Ms Guimelli said.
She said hesitation around longer leases was driven by uncertainty rather than a desire to keep tenants short term.
“A lease is one of the most legally binding documents in Australia,” Ms Guimelli said.
“Once it’s signed, it’s very hard to exit if circumstances change.”
“With rules and costs shifting so often, landlords are nervous about locking themselves in.”
Ms Guimelli said renewal decisions were frequently delayed as owners weighed refinancing, selling or holding until the last possible moment.
“It’s not malicious,” she said.
“Everyone is under pressure. Renters feel it, landlords feel it.”
EqiHome Way founder Andrew Walton said the snap poll was designed to identify what was actually driving behaviour inside the rental system.
“When you strip it back, renters and landlords are asking for the same thing, certainty,” Mr Walton said.
“And the system isn’t delivering it.”
Rent stress is rising, with property managers reporting most applicants are now spending 40 to 50pc of income on rent, far above the old 30pc benchmark.
Mr Walton said the findings suggested instability itself was now feeding the rental shortage by pushing renters back into the market more often and making investors hesitate.
Industry figures agreed warning that without greater stability, more landlords may exit residential property, further shrinking rental supply.
Ms Little said broader economic settings would be critical to reversing the trend.
“If wages don’t rise, the rental system will continue to deteriorate,” she said.
“Affordability is the foundation of stability.”
With vacancy rates already tight, property managers warn a system built on short-term leasing and uncertainty risks worsening the very shortage governments are trying to solve.
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