The answer has two components: how often you can raise the rent, and how often you should.

On one hand, legal regulations set clear limits, but on the other, your understanding of the local market and common sense are crucial to ensure any rent increases align with local median rates and available supply.

As a property investor, you also want to avoid long vacancies or losing reliable tenants.

It’s certainly a tricky balance, and there’s no universal solution—but the insights below will help you navigate these decisions effectively.

How much can rent be raised?

In most states, there are no specific laws regulating how much rent can be increased, so the decision is generally based on what is considered “reasonable.”

Since there is no nationwide definition of a “reasonable” rent increase, prices are typically influenced by local market conditions, including supply and demand.

Rental properties are priced within the context of their local market, where comparable properties set the median rent. In times of higher demand than supply, as seen in the current rental market, landlords have more leverage when negotiating rent increases.

Conversely, when supply exceeds demand, renters tend to have more bargaining power, as was the case a few years ago.

Currently, with extremely low vacancy rates, many landlords are raising rents, sometimes for the first time in years.

However, tenants in all states and territories have the right to challenge an increase they believe is unreasonable. They can take the matter to a local tribunal, where a state government inspector will review the fairness of the proposed rent hike.

How often can a landlord increase the rent?

The frequency of rent increases depends on the type of tenancy agreement (fixed or periodic) and the state you’re in.

• New South Wales: Rent can only be increased once every 12 months, with a 60-day notice. For fixed-term leases, rent can only be raised at the end of the lease. There is no cap on rent increases.
• Victoria: For fixed-term leases under 5 years, rent can only be increased at the end of the lease unless stated otherwise. If allowed, rent can increase every 6 months for leases before June 2019 or every 12 months for leases after this date, with a 60-day notice. For periodic leases or fixed-term leases of 5+ years, rent can only be raised once every 12 months with a 60-day notice. Rent increases must be justifiable, but there’s no cap.
• Queensland: From 1 July 2023, rent for periodic tenancies in Queensland can only be increased once every 12 months with a 60-day notice. There is no cap on how much rent can be raised.
• Western Australia: In Western Australia, rent can be increased once every 12 months with a 60-day notice. For fixed-term leases, rent can only be increased if specified in the agreement. There is no cap on rent increases.
• South Australia: In South Australia, rent for periodic tenancies can be increased once every 12 months with a 60-day notice. For fixed-term leases, rent increases must be written into the agreement with a clear explanation. Rent can also be raised with a lease extension offer, provided it’s been 12 months since the last increase. There is no cap on rent increases.

Is Raising the Rent the Right Move?

While you’re legally allowed to raise rent, it’s not always the best decision. Landlords should weigh the benefits of a rent increase against the costs of tenant turnover, which can include lost rent, re-letting fees, and marketing expenses—sometimes more than the extra rent would bring in over a year.

Before increasing rent, review the local market:

• Check comparable listings with similar features.
• What is the median rent in your area?
• What’s the vacancy rate?

In a tight rental market like today, a rent increase may be a good move. Tenants are less likely to leave, and new applicants should be ready if they do.

While there’s no set rule for how much to raise rent, consider the consumer price index and local market trends. If tenants challenge the increase, these are the factors a Tribunal will consider to assess its fairness.

If the vacancy rate is high, proceed with caution. A property could sit empty for weeks or months, negating any potential gains from raising the rent.

In such a market, consider whether a small rent increase will really benefit you. With more rental options available, tenants may opt for cheaper places, making it wise to wait another 6-12 months before increasing rent.

Long-term, reliable tenants who pay on time and care for your property are often more valuable than chasing higher rents.