Rising rental churn is emerging as a hidden portfolio risk for investor borrowers, with new data suggesting instability – not rent levels – is increasingly driving decisions on both sides of the rental market.
That shift is landing on top of an already stretched market, as Australia heads into 2026 with renters facing one of the toughest affordability environments in years, while rents outpace wages and vacancy rates stay critically low.
New snap‑poll research commissioned by housing model EqiHome Way, surveying more than 600 renters and residential property investors in Victoria and Queensland in late 2025, found instability – not rent levels – is now the dominant pressure shaping behaviour across the rental market. Renters and landlords alike ranked certainty above affordability or return, warning that short‑term leases and last‑minute decisions are fuelling churn and worsening the shortage.
Vita Little, Place New Farm head of property management, said eroding certainty has become one of the biggest threats to rental supply.
“When you remove stability from the system, you get churn, and churn is the enemy of supply,” Little told the Herald Sun. “We’re seeing people move more often than they want to. Every time a property turns over, it tightens the market.”
Frequent tenant turnover drives vacancy periods and higher costs, undermining serviceability at a time when many borrowers are already stretched. Little said traditional benchmarks no longer reflect reality.
“The old 30% of income rule is basically gone,” she said. “Around 80% of applicants we’re seeing are spending 40% to 50% of their income on rent. That creates vulnerability. And vulnerability leads to churn.”
Louisiana Guimelli, Choice Property Group director, said the public debate often misrepresents who is actually behind Australia’s rental stock.
“There’s this idea that landlords are all cashed-up investors, that’s just not the reality,” Guimelli told the publication. “Many are mum-and-dad owners, some inherited properties. Others are renting out former family homes because life circumstances changed.”
Guimelli said most of these smaller landlords want stable, long‑term tenants, but feel increasingly exposed when committing to longer lease terms. She said hesitation around longer leases is being driven by uncertainty, not a desire to keep tenants on short terms.
“A lease is one of the most legally binding documents in Australia,” Guimelli said. “Once it’s signed, it’s very hard to exit if circumstances change.”
Andrew Walton, EqiHome Way founder, said the poll was designed to pinpoint what is really shaping behaviour inside the rental system.
“When you strip it back, renters and landlords are asking for the same thing, certainty,” Walton said. “And the system isn’t delivering it.”
Industry figures warn that without greater stability, more landlords may exit residential property, further shrinking rental supply and leaving remaining investors carrying a larger share of market risk.
For mortgage brokers, the message is clear: stress‑test investor clients for vacancy and churn risk, build in larger buffers, and structure loans that can withstand a more volatile rental income stream as Australia heads into 2026.
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