Less than 40 per cent of rental housing in Victoria complied with minimum housing standards in 2024, with mould, dampness, bathroom and electrical safety among the major issues identified by La Trobe University researchers in the first large-scale analysis of the sector.
In Australia, almost 25 per cent of households rent, yet the quality and safety of rental housing remains uneven.
According to a report by La Trobe Business School, published in the journal Cities, of the 1,723 rental homes audited in the first five months of 2024, just 39.91 per cent passed Victoria's minimum standards.
Socioeconomically disadvantaged areas are particularly hardest hit, with just 22.84 per cent of the 162 homes audited in Thomastown meeting housing standards, followed by Lalor with 24.81 per cent of 133 homes and Elwood with 26.55 per cent of 113 homes meeting standards.
The report, compiled for Property Compliance Victoria (PVC), analysed more than 11,000 rental housing audits conducted by PVC across Victoria between March 2021 and May 2024. Over that period 54 per cent of rental housing complied with minimum housing standards.
It found there was a variation of compliance pass rates by suburb, rental agency and building class or property such as apartments or houses. In addition, there were not as many property audits in regional areas.
While it found overall there was a steep decline in compliance pass rates over the period - down from 76.16 per cent of the 926 homes audited in 2021 - the report said this reflected an increase in the number of rental properties undergoing compliance audits, which rose from 11 per cent to 70 per cent over the three years.
The report said audits were previously focussed on properties where rental providers were confident of meeting requirements, "whereas increased awareness of the standards and associated penalties has led to a more representative range of properties being inspected, exposing more widespread non-compliance".
"The declining pass rate observed over the period can be attributed to a combination of market behaviour, regulatory clarification, and improvements in audit consistency, rather than a decline in property quality," the report says.
Lead author, Dr Anisur Rahman from the La Trobe Business School, said the analysis highlighted the ongoing shortcomings in property management practices and regulations.
"The persistence of low compliance across multiple standards, the performance gap between high and low-volume agencies, and the uneven geographic distribution of failures all point to structural weaknesses in the current regulatory model," he said.
Dr Rahman said there was almost universal compliance with hygiene-related standards such as toilets, vermin-proof bins and laundries, suggesting that clear guidelines and low-cost interventions are more likely to be adopted across the sector.
"By contrast, persistent failures in managing indoor environmental risks, such as mould, highlight the need for targeted technical programs and proactive monitoring," he said.
Dr Rahman said ensuring rental housing quality met housing standards not only improved living conditions but also contributed to property value and broader community well-being.
"However, persistent non-compliance continues to undermine regulatory efforts to provide safe and fair housing," he said.
"These findings support calls for a differentiated regulatory strategy that recognises the varied operational and financial capacities of property managers."
Property Compliance Victoria Sales Director Craig Topp said more needed to be done by the regulator Consumer Affairs Victoria to support property managers.
"It is broadly recognised that property managers cannot assess against the minimum standards, specifically the structural soundness, mould and dampness, and ventilation standards," he said.
"There are also no official accreditation or training processes in place specific to minimum standards. This causes an ever-increasing gap between how Consumer Affairs Victoria, property managers and independent Minimum Standards audit businesses assess against the standards."
Read the full report: From regulation to reality: Socio-spatial inequality of rental housing standards compliance in Victoria, Australia - ScienceDirect
