The voters Allan needs to win over on housing are volatile – and their numbers are growing

There was some rare good news on the economic front this week when fresh data showed we are winning the battle against inflation, with Australia’s headline inflation sinking to its lowest level in more than three years.

But services inflation continued to creep up, largely driven by increases to insurance premiums, childcare fees and rents, all of which remain a thorn in the side of governments.

Premier Jacinta Allan will be eager to win over renters in Melbourne’s middle suburbs ahead of the 2026 election.Credit: Jason South

In the wash-up, economists broadly agree that while rents have eased back in recent months, the cost of renting a home in Australia will continue to be a problem, and increasing supply will be the only true solution.

Days and days of housing announcements suggest Jacinta Allan isn’t shying away from this issue – in fact, she seems willing to stake her premiership on it.

Allan is banking on her plan to reshape Melbourne’s urban landscape by boosting housing stock in existing suburbs, hoping it will alleviate rental stress by increasing supply as well as turning more younger Victorians into home owners.

While the premier may lay claim to these lofty motivations, there is, of course, an electoral advantage should Labor’s reforms woo the increasingly powerful renting class.

Over the past decade, the major parties largely ignored the rising power of the renting cohort, allowing the Greens and teal independents to harness it to their advantage.

Roughly one-third of Australian households rent, while another third own their home outright, and the final are mortgage payers.

But in Victoria, a recent parliamentary inquiry found that while most Victorians still live in a home they own, homeownership overall is declining, starting later in life, and increasingly concentrated in fewer hands, while the number of renters is growing.

Until recently, Labor had largely banked on the support of renters. Pollsters, including former Labor campaign strategist Kos Samaras, say renters normally favour left-wing politics and float between the Greens and Labor.

Given that Labor is losing support in their traditional heartland of outer suburban Melbourne, locking in support from renters in the inner and mid-tier suburbs will be crucial to its re-election bid.

Insiders believe that higher levels of renters in seats like Ashwood and Box Hill will improve the government’s chances of holding on to those middle-ring suburbs at the next election. But voting patterns among renters are volatile, particularly among those aged under 40, whose values don’t always neatly align with the major parties.

At the last state election, seats such as Footscray, Preston and Northcote were close to being claimed by the Greens championing a fairer housing agenda – and are expected to be heavily targeted again in 2026.

Problematically for Allan, efforts to increase housing supply will take time, meaning the government cannot guarantee its efforts will convince this influential voting bloc by the next election day.

The government has predicted 230,000 additional rental properties will be added to the Victorian market over the next 10 years including 70,000 facilitated by the government’s measures.

But it’s off to a bad start.

Between March 2023 and March 2024, the number of active bonds held by the Residential Tenancies Bonds Authority dropped 20,000, suggesting landlords (and their rental properties) are exiting the market.

Labor insiders say rental reforms announced this week have been tailored to “plug the hole” for renters while the government works at encouraging more development.

On Wednesday, Labor announced a ban on “no fault” evictions, a cap on fees for breaking leases, as well as fines for landlords caught making dubious claims on a tenant’s bond. All sellable policies for renters doing it tough. But unless these changes genuinely improve conditions and housing opportunities by November 2026, the government could be in strife. They will also have to ensure any efforts to make tenancies more secure don’t act as a repellent to investors.

While Labor’s commitment to encourage development and drive up rental stock should be commended, industry experts believe many of the government’s rental changes go too far and risk driving out landlords who are already exiting the market at an unprecedented rate.

So far, Labor has also been unable to weaponise some of its existing promises to improve the lives of renters. Legislation that promised to close a “loophole” that allowed agents and landlords to accept bids on rental properties have faced delays.

Despite these obstacles, Labor MPs remain confident its housing package will be an overall advantage to its re-election bid, particularly while the Coalition flirt with NIMBYs and the Greens fight among themselves.

But reform of the housing system will be a lengthy process. It will be crucial that Labor gets the balance right, and quickly.

Annika Smethurst is state political editor.

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