Australian rental market faces pressure from tax changes and deposit hurdles

Australian rental markets face significant pressure due to shifting tax policies and high entry barriers for homebuyers. NAB has warned that rents in Sydney and Melbourne could rise by as much as 30 per cent. This projected increase follows Labor’s Budget decision to cancel negative gearing for existing homes starting July 2027 for properties exchanged after May 12. According to NAB’s head of Australian economics Gareth Spence, investors may seek higher gross rental yields to compensate for the loss of tax benefits, which could drive up rents even if property prices remain stable.

Simultaneously, the difficulty of saving for home deposits remains a major hurdle for Australians. With national median weekly rents reaching a record $705, proptech company Coposit is launching a rent-to-buy scheme called ‘Unrent’ in October. The program aims to help eligible tenants by redirecting their accumulated weekly rental payments toward a home deposit, addressing the gap for those who can manage weekly housing costs but struggle to save enough for a down payment.