(VIC) Introduce a Rent Cap
Author: Noah Genziuk, Alex Faehrmann, Isabella Jiang, Megan Yap, Urszula Nowak & Jemail Asani | Publish date: 10/9/2026
P: In VIC, there is no formal limit on the amount by which rent can be increased between lease agreements.
S: The VIC Minister for Consumer Affairs should amend Section 44(3) of the Residential Tenancies Act 1997 (VIC) to introduce a new section to cap the maximum allowable amount for a rent increase by no more than 10% above the growth in the rents component of the Consumer Price Index (CPI).
E: Peninsula Community Legal Centre (PCLC) (2023): ‘PCLC supports limiting rent increases by legislation … [in] the same way as [the] ACT.’
Problem Identification:
Section 44(3) of the Residential Tenancies Act 1997 (VIC) (the Act) states that a tenant must be informed of ‘the amount of the rent increase’ and ‘the method by which the rent increase was calculated’. The Act also states that a valid rent increase in VIC must include at least 90 days' notice and cannot occur more than once a year. However, the Act does not prescribe a set formula for determining a maximum allowable increase in rent.
According to Better Renting, this means that ‘landlords can charge as much as they can get away with’. The Victorian Council of Social Service (VCOSS) highlighted ‘rent increases are compounding other cost-of-living pressures, pushing more renters further into housing stress … [and] poverty.’
Context:
Acting CEO of Tenants Victoria, Cameron Bloye, outlined that ‘rent can jump by 30, 40, even 50% overnight’. The Consumer Policy Research Centre (CPRC) (2025) observed that rent increases have varied from ‘3% to 52% ... compared with just 2.4% CPI growth.’
The Australian Housing and Urban Research Institute refers to ‘rent cap[s]’ as a formal, legislated ‘[restriction on] how often rents can be increased, [and/or] how much they can be increased’.
In the ACT, rent cap legislation ensures rent cannot be increased more than 110% of the percentage increase in the CPI for rents. The Centre for Equitable Housing (CEH) stated that the ACT’s rent cap is a form of ‘rent stabilisation’ protecting residents ‘from significant rent price spikes’.
Arguments:
The Victorian Legal Services Board and Commissioner found that ‘large rental increases’ lead to ‘financial strain for renters.’ Everybody's Home (2025) reported that '79.1 percent of renters in Melbourne are experiencing financial stress’. They further observed that low-income renters in Melbourne allocate ‘82 percent of their income toward rent … indicat[ing] severe financial stress.’ They found that for high-income renters ‘rent still consumes 30 percent of net income,’ which ‘only just becomes affordable’. VCOSS explained that ‘even small and “reasonable” increases [present] … huge challenges. Families are choosing between rent and food.’
According to VCOSS, low-income renters were ‘forced to choose between absorbing rent increases ... or exiting their tenancy' and ‘experiencing periods of homelessness.’ Homelessness Australia noted ‘relentless rent increases … are driving more Australians into homelessness’. They reported a 5.3% increase in demand for homelessness services in VIC between December 2022 and March 2023. Tenants Victoria noted a case where a renter was advised by his real estate agent to ‘get out of there – because they’re just going to keep on putting the rent up.’ Sisson and Bowyer-Pont (2023) stated ‘rent increase notices serve as a de facto eviction [notice].’
VCOSS reported that the current pathway to appeal rental disputes was ‘not working well enough.’ The CPRC and Tenants Victoria noted ‘renters can seek a rent assessment from Consumer Affairs Victoria’ for significant rent increases. However, Anika Legal reported that renters avoid this process out of ‘[concern] about retaliation from their rental provider’.
Kholodilin (2024) noted that rent caps can generate ‘adverse consequences that work against its intended purpose [of reduced rents]’, such as ‘higher rents for dwellings exempted from rent control and reduced residential construction’. However, CEH argued that ‘[many] critiques of rent control are directed at [earlier forms of] rent control’ that did not allow for gradual price growth. They added that newer proposals for ‘[stabilising] rental increases’ are ‘feasible in Australia, and may reduce … rent spikes and tenant insecurity.’
Advice/Solution Identification:
PCLC and the Youth Affairs Council of Victoria (YACVIC) have called for the introduction of a cap on rent increases in line with the ACT’s legislation. YACVIC stated that ‘[this] would offer renters protection against being unreasonably priced out of rentals, or being exposed to rental stress’.
Precedent:
There is domestic and international precedent for capping increases on rent. The ACT has introduced a rent cap (see context). In Scotland, ‘rent increases … [are] limited to the [CPI]’ plus one to 6%. In California, rent increases are capped per year at ‘more than 10% total or 5% plus the percentage change in the cost of living’. Further, VIC has already implemented a related policy: a temporary rent freeze from 2020 to 2021.
Public Support of the Solution:
(This list reflects publicly stated positions and should not necessarily be taken as endorsement of this specific brief.)
Broad Support:
Council of Homeless Persons - They have recommended reversing the onus of appeals on rent increases to sit with the residential rental provider and for the removal of the no-cause notice to vacate at the end of the first fixed-term lease. However, they have not explicitly called for a rent cap based on CPI measures.
Cohealth - They have called for immediate support for renters struggling in the current rental market. However, they have not explicitly called for a rent cap.
Justice Connect - They have recommended stronger VCAT-related procedural appeal mechanisms for disputing rent increases and evictions. However, they have not called for a legislated rent cap.
Tenants Victoria - They have called for increased funding for a Rent Increase Fairness Formula in VIC, and for amendments to the Residential Tenancies Act 1997 (VIC) for rental protections to apply to all renters. However, they have not explicitly called for a rent cap.
Better Renting - They have recommended legislative change to ‘implement limits on rent increases’ and suggested limiting rent increases to a ‘flat percentage figure’. However, they do not explicitly support the ACT model for rent caps in its current form.
Dr Alistair Sisson (see acknowledgements) - In a meeting with FORE, he recommended implementing a cap on rents nationwide, alongside other reforms to ensure greater security for renters in the private rental market. He supported a rent cap in-principle, though not the ACT model specifically. He explained that this was because the calculation method based on the CPI for rents was not sufficiently protective in times of high inflation, nor aligned with international best practice. He called for an initial 3% cap for sitting tenants and a slightly higher cap in between tenancies.
News Coverage:
RealEstate.com - “Andrews-era rent freeze to be put to Vic parliament again”. This article examined responses to calls for increased tenant protections from industry stakeholders and experts. By: Nathan Mawby | 1 April 2026 - Read the article here.
Sydney Morning Herald - “Where landlords have been able to put rents up most – and least”. This article examined changes in rental price growth across all Australian jurisdictions following the introduction of rent caps in the ACT. By: Elizabeth Redman | 11 February 2026. Read the article here.
The Guardian - “‘Brutal rental market’ sees spike in number of Victorian tenants evicted because they can’t make payments”. This article highlighted affordability challenges for VIC tenants and showed that a majority had received a rent increase notice within the past twelve months. By: Stephanie Convery | 30 April 2025 - Read the article here.
Australia Institute - “Overwhelming voter support for rent caps and increased media release showing the support for rent caps and increased housing spend”. This article summarised support for rent caps amongst voters. By: The Australia Institute | 7 August 2023. Read the full article here.
Sydney Morning Herald - “The one place in Australia with rent control”. This article explained the impacts of rent control policies in the ACT. By: Rachel Clun | 25 June 2023. Read the article here.
Where to go to learn more:
(2023) Inquiry into the Worsening Rental Crisis in Australia | Peninsula Community Legal Centre - This submission examined the impacts of VIC’s rental crisis on low-income community members, and explored relief mechanisms to ensure housing security and prevention of further evictions. They recommended implementing a rent cap in line with the ACT. Read the full submission here.
(2023) Inquiry into the rental and housing affordability crisis in Victoria | Cohealth - This submission examined the rental and housing affordability crisis in VIC and the impact it had on individuals, families and communities. Read the full submission here.
(2023) Priced Out: An Index of Affordable Rentals for Australia’s Essential Workers | Everybody’s Home - This report authored by Anglicare Australia highlighted ongoing trends in affordability among all major Australian cities. Read the report here.
(2023) Regulating rents: international examples and experience | Shelter NSW & Tenants Union of NSW - This report from Dr Alistair Sisson and Dr Penelope Bowyer-Pont of Macquarie University summarised the range of rent regulations internationally and presented conditions for how rent regulation might be implemented in NSW. Read the report here.
(2023) Submission to the Inquiry into the Rental and Housing Affordability Crisis in Victoria | Youth Affairs Council Victoria - This submission examined the impacts of VIC’s rental crisis on young people seeking housing security. Read the submission here.
(2025) Renting in Victoria in 2025 | Victorian Council of Social Service - This report provided insights from frontline community sector workers assisting renters and outlined factors contributing to heightened rental insecurity and housing stress in the current housing market. Read the report here.
Residential Tenancies Act 1997 (VIC) - Read the Act here.
Human Perspective:
Content Warning: Financial stress, housing insecurity
Diane is 45, renting a unit in Melbourne's south-east where she has lived for 9 years with her daughter, Zoe. Her rent has been steadily rising for years. She doesn’t know how much more she can take because further rent hikes would put her in severe financial stress. Her latest tenancy agreement increased her rent by 35%. The new rent equated to more than half of her income, impacting her ability to afford basic household necessities. Diane began skipping meals, so her daughter wouldn't notice the fridge emptying, and paid the electricity bill in instalments. Unable to afford this, she and her daughter had to move. The only place they could find was an hour and a half away from Zoe’s school. With nowhere cheaper to go, Diane felt trapped between a rent she couldn't pay and a market she couldn't face.
To protect the anonymity of those involved, this is a fictionalised account drawn from an amalgamation of real-life stories, experiences and testimonials gathered during the research process for this brief. Any resemblance to actual individuals is purely coincidental.
Conflict of interest/acknowledgment statement:
Dr Alistair Sisson (Macquarie University Research Fellow in the School of Social Sciences) confirmed their support in-principle for this recommendation in a meeting with FORE Good held on 30 July 2026.
Dr Konstantin Kholodilin allowed for his statement on rent control to be used in this brief, with permission shared on 25 July 2026.
Support
If your organisation would like to add your support to this paper or suggest amendments, please email Info@foreaustralia.com.
Disclaimers
Please review all FORE disclaimers here.
Reference list:
ACT Government. (2026, July 14). Rent increases. https://www.act.gov.au/housing-planning-and-property/renting/rent-increases
Anika Legal. (2025). Unrepresented: Improving VCAT and RDRV for self-represented renters. https://anika-clerk.s3.amazonaws.com/documents/Unrepresented_-_Anika_Legal_-_November_2025.pdf
Australian Housing and Urban Research Institute. (2023, June 27). Understanding what is a ‘rent freeze’, a ‘rent cap’ or ‘rent control’. https://www.ahuri.edu.au/analysis/brief/understanding-what-rent-freeze-rent-cap-or-rent-contro
Better Renting. (2022, November 18). Rent regulation around Australia. https://www.betterrenting.org.au/rent_regulation_around_australia
Brody, G. (2024). Advancing housing justice: The opportunity for legal services to improve access to housing. Victorian Legal Services Board and Commissioner. https://lsbc.vic.gov.au/sites/default/files/2024-08/Housing_Document_DIGITAL_PFO_WEB.pdf
Centre for Equitable Housing, V&F Housing Enterprise Foundation, & Per Capita. (2023). Regulating rentals in Australia: What works? https://centreforequitablehousing.org.au/wp-content/uploads/2023/08/Regulating-Rentals-in-Australia-what-works_-_FINAL_15.8.23-WITH-COVERS.pdf
Cohealth. (2023). Submission to the inquiry into the rental and housing affordability crisis in Victoria. https://www.cohealth.org.au/wp-content/uploads/2023/08/cohealth-submission-Inquiry-into-the-rental-and-housing-affordability-crisis-in-Victoria-July-2023.pdf
Consumer Affairs Victoria. (2026, March 30). Challenging rent increases or high rent. https://www.consumer.vic.gov.au/housing/renting/rent-bond-bills-and-condition-reports/rent/challenging-rent-increases-or-high-rent
Consumer Policy Research Centre. (2025, September 23). Victorian renters face unprecedented rent hikes. https://cprc.org.au/release/victorian-renters-face-unpredictable-rent-hikes/
Council to Homeless Persons. (2023). Council to Homeless Persons submission to the Parliamentary Inquiry into the rental and housing affordability crisis in Victoria. https://chp.org.au/wp-content/uploads/2023/07/230713-Submission-to-the-Parliamentary-Inquiry-into-the-rental-and-housing-affordability-crisis-in-Victoria-FINAL.pdf
Everybody’s Home. (2025). Housing in crisis: A snapshot of Melbourne. https://everybodyshome.com.au/wp-content/uploads/2025/03/Melbourne-Snapshot.pdf
Everybody’s Home. (2025). Priced out: An index of affordable rentals for Australian voters. https://everybodyshome.com.au/wp-content/uploads/2025/03/EH_Priced-Out-Report_2025.pdf
Justice Connect. (2023). A place to call home: Increasing housing security and supply for all Victorians [Submission]. https://justiceconnect.org.au/wp-content/uploads/2026/03/JCHL-Submission-to-the-Inquiry-into-the-rental-and-housing-affordability-crisis-in-Victoria-July-2023.pdf
Kholodilin, K. A. (2024). Rent control effects through the lens of empirical research: An almost complete review of the literature. Journal of Housing Economics, 63, Article 101983. https://doi.org/10.1016/j.jhe.2024.101983
Office of the Attorney General. (n.d.). Landlord-tenant issues. State of California Department of Justice. https://oag.ca.gov/tenants
Panckridge, S. (2025). Setting the price: The drivers of rent increases in Victoria’s private rental market. Consumer Policy Research Centre & Tenants Victoria. https://tenantsvic.org.au/wp-content/uploads/2025/09/CPRC-Setting-the-Price-Tenants-Victoria.pdf
Peninsula Community Legal Centre. (2023). Senate Committee: Inquiry into the worsening rental crisis in Australia [Submission]. https://pclc.org.au/wp-content/uploads/2023/08/PCLC-Submission-Senate-Committee-Inquiry-into-the-worsening-rental-crisis-in-Australia.pdf
Residential Tenancies Act 1997 (VIC). https://www.legislation.vic.gov.au/in-force/acts/residential-tenancies-act-1997/113
Scottish Government. (n.d.). Private renting. https://www.gov.scot/policies/private-renting/rent-controls/
Sisson, A., & Bowyer-Pont, P. (2023). Regulating rents: International examples & experience. Shelter NSW & Tenants Union of NSW. https://files.tenants.org.au/policy/2023-11-RentRegulation-Sisson.pdf
Tenants Victoria. (2025). Victorian state budget submission 2026 – 2027. https://tenantsvic.org.au/wp-content/uploads/2025/11/Tenants-Victoria-Victorian-State-Budget-Submission-2026-2027.pdf
Victorian Council of Social Service. (2025). Renting in Victoria in 2025: Insights from frontline community sector workers. https://vcoss.org.au/wp-content/uploads/2025/08/Renting-in-Victoria-2025-1.pdf
Youth Affairs Council Victoria. (2024). Inquiry into the rental and housing affordability crisis in Victoria. https://www.yacvic.org.au/assets/Documents/YACVic-Submission-Inquiry-into-the-Rental-and-Housing-Affordability-Crisis-2023.pdf
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