what does the budget mean for Australia’s squeezed renters?
- Written by: Ehsan Noroozinejad, Senior Researcher and Sustainable Future Lead, Urban Transformations Research Centre, Western Sydney University
There is a large group in Australia’s housing crisis that often gets less attention. They are not homeless. They are not homeowners. They are renters in the middle[1].
They may be working full-time, studying, raising children, caring for parents or saving for a deposit. They may not qualify for social housing or major government support. But they are still under serious pressure.
For them, renting is not a short stop before buying a home. It is a long-term reality. That is why the new federal budget[2] matters.
Read more: At a glance: budget 2026[3]
Overall, will this budget make renting more affordable, secure and stable? For some renters, yes, a little.
But for many ordinary renters, the budget will not feel like immediate relief. Many still face the same basic problem: too many people compete for too few suitable homes[4].
Feeling the pressure
The Australian Institute of Health and Welfare[5] estimates around 31% of Australian households were renters in 2021: about 2.9 million households.
The number is rising. The Australian Bureau of Statistics’ 2021 census[6] recorded 2,842,378 rented dwellings – up by about 360,000 renting households from 2016.
The pressure on many of these renters can be immense.
By April 2026, median weekly rents[7] in Austraila’s most expensive city Sydney reached $990 for houses and $780 for apartments. For context, Domain’s Sydney rental reports show median weekly asking rents were $530 for houses and $525 for units in mid-2016[8]. They were $550 and $470 in mid-2021[9].
For many renters, this pressure is no longer a temporary squeeze, it is reshaping where they can live, work and plan their future.
Will the budget help?
Pleasingly, it was announced the Commonwealth Rent Assistance[10] will continue. This is a payment for eligible people who rent and also receive certain government payments, such as income support or family assistance.
The budget stated more than 1.4 million renters[11] receive this assistance – maximum rates have risen by more than 50% since March 2022.
That matters. For low-income renters, even a small increase can help with groceries, transport or school costs.
But it does not reach everyone: many renters under pressure do not qualify.
A nurse, teacher, retail worker or single parent in the private rental market may earn too much for major help, but still not enough to feel secure.
The budget also points to renters’ rights reforms being developed with states and territories. These include bans on “no grounds” evictions in most states, limits on rent increases to once a year, and minimum rental standards.
This means a tenant should have better protection[12] against being removed without a clear reason, should not face repeated rent rises in one year, and should expect a basic standard of housing.
That is important. A rental home is still a home. A child should not have to change schools because a family is pushed out with little certainty. An older renter should not live with mould, broken heating or unsafe wiring because they fear complaining.
But the budget relies on new rental supply. It states build-to-rent[13] measures could support around 80,000 new rental homes over the next decade[14], including up to 1,200 affordable homes in the near term.
Build-to-rent means homes built mainly to be rented out, rather than sold to individual buyers.
This could help. More rental homes can reduce pressure. Larger professionally managed rental buildings can also offer longer leases and more stable renting.
But the key words are “over the next decade”. That will not help a family facing a rent rise next month.
Finally, the budget changes negative gearing and capital gains tax[15]. Negative gearing is when a property investor makes a loss on a rental property and uses that loss to reduce tax on other income. Now, negative gearing for residential properties will be limited to new builds[16].
The aim is to push investment toward creating extra homes, not just buying existing ones.
Treasury says these tax changes are likely to increase rents by less than $2 a week[17] for a household paying median rent.
That is reassuring. But renters may still be cautious. Many have already lived through sharp rent rises[18].
What would make a real difference?
Australia needs more rental homes where people actually need to live: near jobs, public transport, schools, hospitals and services.
It needs faster delivery of homes[19]. The budget’s $2 billion Local Infrastructure Fund[20] is useful because new homes need roads, water, power and sewerage before people can move in.
We also need stronger renter protections[21] that are consistent across the country, more affordable rental housing for key workers, and more social housing so people in crisis are not forced to compete in the private rental market.
Renters need stability – they need to know they can stay in their home, manage rent, raise children, work, study and plan their lives.
The budget takes some steps. But for Australia’s squeezed renters, the year ahead will still be hard unless these measures quickly turn into more secure, affordable homes.
References
- ^ They are renters in the middle (www.abc.net.au)
- ^ new federal budget (budget.gov.au)
- ^ At a glance: budget 2026 (theconversation.com)
- ^ compete for too few suitable homes (sqmresearch.com.au)
- ^ Australian Institute of Health and Welfare (www.aihw.gov.au)
- ^ 2021 census (www.abs.gov.au)
- ^ median weekly rents (www.rent.com.au)
- ^ mid-2016 (ffx.adcentre.com.au.s3.amazonaws.com)
- ^ mid-2021 (www.domain.com.au)
- ^ Commonwealth Rent Assistance (www.servicesaustralia.gov.au)
- ^ 1.4 million renters (budget.gov.au)
- ^ tenant should have better protection (www.nsw.gov.au)
- ^ build-to-rent (www.ato.gov.au)
- ^ 80,000 new rental homes over the next decade (www.ahuri.edu.au)
- ^ negative gearing and capital gains tax (budget.gov.au)
- ^ will be limited to new builds (www.abc.net.au)
- ^ increase rents by less than $2 a week (budget.gov.au)
- ^ sharp rent rises (www.aihw.gov.au)
- ^ faster delivery of homes (nhsac.gov.au)
- ^ $2 billion Local Infrastructure Fund (ministers.treasury.gov.au)
- ^ renter protections (www.studyaustralia.gov.au)
Authors: Ehsan Noroozinejad, Senior Researcher and Sustainable Future Lead, Urban Transformations Research Centre, Western Sydney University
