26/08/2026
Treasury says rent goes up $2 a week. NAB says 25 to 30%. Here's why the estimates are so far apart.
The gap comes down to a mechanism that isn't often explained. Investors price a property on yield, rent divided by price, essentially the return on the house. Negative gearing and the capital gains discount were part of that return. Take them away, and the yield has to do more of the work on its own.
NAB's Gareth Spence estimates Sydney and Melbourne yields would need to shift from around 3.5% to 4.5%. If prices stay exactly where they are, that works out to a 25 to 30% rent rise, but that's assuming prices don't move at all. If prices fall instead, the yield adjusts on its own and rents move less. SQM's Louis Christopher puts that scenario at closer to 15%.
So does it land on renters, on prices, or somewhere in between?
If you're renting right now, which way do you think it goes? Let us know in the comments.
