Melbourne renters face $10,000 rent increase, landlords push for more – realestate.com.au

Renters in Melbourne are facing the prospect of having to pay almost $40,000 a year for a roof over their heads by 2035, almost $10,000 more than is typical today.

But one of the country’s leading real estate investment groups is urging landlords to push rents even higher in a bid to recoup the rising costs forced on them by the state government.

Rents are expected to become a battleground between landlords and the government over the next decade as Victoria works to build enough homes to prevent the rise in rental costs, while at the same time there are signs that property investors are leaving the state at a faster rate than buying into it.

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SQM Research founder Louis Christopher predicts rent increases of 2 to 4 percent in Australian capitals over the next year.

Mr Christopher said Melbourne could be lower, predicting an increase of 1-3 per cent for the Victorian capital, as the state government has done more for renters than other capitals at this point.

But figures are unlikely to hold at that level, and as more homes are built, he says rents will fall back in line with pre-pandemic trends of almost 2.6 percent in line with the consumer price index.

This Tarneit home shows what you get from the typical Melbourne rental property today, which was advertised at $585 per week in November 2025.

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In another ten years, historical trends indicate that the same address could cost $767 per week.

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“It should return to pre-Covid levels, and that will become a reality over time,” Christopher said.

Projected forward, the trend would increase rents for the typical Melbourne home from $580 a week to $741, leaving renters having to find an extra $9400 a year to keep the roof over their heads.

It would also see the number of suburbs where a typical house costs $1,000 a week in rent rise from 25 today to more than 100 by 2035.

Mr Christopher advised that most renters should ‘seriously consider’ buying a home if they can afford it. “Yes, the market will pick up over the next year, and I think the way things have gone for renters who became first-home buyers has been better than for those who remained renters, and I don’t see that changing anytime soon,” he said.

Ben Kingsley, chairman of the Property Investors Council of Australia, is advising landlords to increase rental yields by 4 to 5 per cent as they try to recoup rising costs from the Victorian government “to get their investment back on track”.

This Boronia demountable in a backyard is one of the few houses in Melbourne available today for $300 a week. By 2035, this could cost almost $400.

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Inside, the house offers budget accommodation.

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“If conditions are such that vacancy rates are low, we encourage our PICA members and all landlords to increase their rents by 4 to 5 percent, as long as land market conditions allow this,” Kingsley said.

“And if governments continue to raise taxes and raise costs, we will go even higher and recommend 5-6 percent.

“And we think this is a very reasonable response to achieve a return on our investment that we are not currently getting.”

PICA’s 2025 membership survey attracted around 900 responses this year, with 65 per cent noting that they had been able to pass on less than 10 per cent of the additional costs they faced over the past year – despite the majority of landlords surveyed experiencing cost increases of more than 11 per cent.

Excluding interest, nearly 270 of them reported that their costs had increased by 11 to 20 percent, while 160 of them experienced a cost increase of 21 to 40 percent.

At the top end of the Melbourne rental market, this Mount Waverley house was asking $1500 per week in November 2025. This is expected to be closer to $2000 every seven days by 2035.

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A two-bedroom apartment in St Kilda today could cost you €1,500 per week. Historical data indicates that in another ten years this figure will rise to $1965.

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While the increases would be difficult for renters to bear, over time Mr Kingsley warned that if rents did not keep up with costs for landlords and yields fell too low, a growing proportion would choose to sell and invest elsewhere – leading to fewer available rental properties.

“If the yield drops that low and you’re not getting a capital appreciation return, then you move out of that asset,” he said.

He pointed to reports from the state’s Department of Families, Fairness and Housing, Homes Victoria, which indicated the number of rental bonds in Victoria had fallen every quarter for the past 18 months, in a sign that landlords were tired of selling.

A Victorian government spokesperson said the state “leads the nation on tenants’ rights” and conflicting government bond data from Consumer Affairs suggests the number of rental properties increased from 732,125 to 736,352 in the last financial year.

However, it still remains below the 738,414 bonds held in the 2022-2023 financial year.

Priperty Investors Council of Australia chairman Ben Kingsley is urging landlords to further increase rents amid fears poor returns could lead to more sales and negatively impact the state’s rental supply.

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Rental lawyer and social media personality Jordan van den Lamb hopes that governments will intervene in the rental market in the coming decade. Photo: Matt Hrkac.

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This week they introduced further regulations, including a ban on no-fault evictions and the latest phase of a ban on rental bids, aimed at “reinforcing Victoria as the best state in the country for tenants’ rights”.

The Victorian Government has also set a target of building 800,000 homes by 2035, about 80,000 per year. It is currently below that figure; by 2025, about 60,000 are expected to be built across the state.

But socialist housing advocate and the man behind Australia’s social media accounts, Jordan van den Lamb, said renter households were struggling to survive, with many forced to choose between rent and food or medicine, and he feared the increases “will be worse than forecasts”.

“You’re seeing household size increase for people who don’t own their homes, so we’re going to have tight living spaces for renters as people rely on living with other people to afford the housing they rent,” he said.

Tenants Victoria chief executive Jennifer Beveridge said Victoria needed a “fair formula for rent increases” because while averages might indicate small, stable increases, many tenants were experiencing severe cases where rents rose by 10, 20 or even 30 per cent.

This South Morang home is advertised for $800 per week, which could rise to $1048 per week.

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“This is not about stopping small, steady rent increases, but about preventing the shocking rent spikes that we have seen push people to the brink of homelessness,” Ms Beveridge said.

What history says your rent should be in 2035

$300 per week (2025) — $393 per week (2035)

$400 per week (2025) — $524 per week (2035)

$500 per week (2025) — $655 per week (2035)

Middle house in Melbourne: $580 per week (2025) – $760 per week (2035)

$600 per week (2025) — $786 per week (2035)

$700 per week (2025) — $917 per week (2035)

$800 per week (2025) — $1048 per week (2035)

$900 per week (2025) — $1179 per week (2035)

$1000 per week (2025) — $1310 per week (2035)

This house in Moonee Ponds is about what you get for $1000 a week in Melbourne today. That figure could be more than $300 higher by 2035.

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$1200 per week (2025) — $1638 per week (2035)

$1500 per week (2025) — $1965 per week (2035)

The data reflects expected increases in rental prices if they continue to follow historical trends in line with the pre-pandemic 20-year average consumer price index.

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