Two-Year Leases Are on the Table. Keep Renting, Rentvest, or Buy? (2026)

Two-Year Leases Are on the Table. Keep Renting, Rentvest, or Buy? (2026)

The ACTU put its housing proposals to the Federal Government on 19 August 2026, and LinkedIn News carried the story on 21 August. This article covers what is actually proposed, what two years of rent adds up to at current medians, and the three honest paths from here.

On 19 August 2026 the Australian Council of Trade Unions put a housing package to the Federal Government: a national two-year rental standard in place of the usual one-year lease, and a lift in public housing construction from about one in 50 new homes to one in 10. By 21 August the story was being discussed on LinkedIn News, with the usual split between people who see stability for families and people who see a headache for landlords. Both camps are arguing about a proposal. Nothing has changed in tenancy law, and the Housing Minister has said the ideas are not government policy. What the proposal does usefully is put a number on something renters rarely add up: what two years of rent actually costs, and whether that money is doing the right job. This article is general information, not credit assistance, and lender criteria apply.

What the ACTU Is Actually Proposing

Start with the primary source rather than the commentary. The ACTU media release of 19 August 2026 sets out a package that unions are putting to the Federal Government. The lease element is a new national tenancy standard of two years, intended to give renters more stability, make it easier to plan ahead and reduce the cost of moving repeatedly. The release is specific on the mechanism: landlords would be required to offer at least two years of housing security as the default standard, with renters still free to choose shorter leases. The package also includes stronger protections against unfair evictions and rent gouging. Delivery would run through National Cabinet, by updating the 2023 A Better Deal for Renters agreement that harmonised renter rights across the Commonwealth, states and territories.

The supply element is the bigger structural ask. The ACTU wants one in every ten new homes built to be public housing, alongside a goal of lifting public housing to at least 6 per cent of total housing stock. The release frames the one in ten figure as a return to the rate achieved under the Hawke Government, and a fivefold increase on the current rate of about one in 50. ACTU president Michele O’Neil put the logic plainly in the union release: nurses, teachers and other workers are living with the yearly uncertainty of rent increases and one-year leases as the standard option, and moving homes costs money, disrupts lives and pushes workers further from their jobs.

Now the status, because it matters for every decision below. This is a proposal to government. The ABC reported on 18 August that Housing Minister Clare O’Neil called the suggestions valuable and said they would be considered, while being explicit that “They are not government policy”. No tenancy act has changed. No lease you sign this week is affected. If the standard were ever adopted, it would arrive through National Cabinet and state legislation, on a timetable nobody can promise, and this article makes no prediction about whether that happens. What the proposal does is put a two-year horizon in front of every renter, which is a useful prompt for a question most people never ask in dollars.

What Two Years of Rent Adds Up To

The rent figures below are the ones already published on this site: Cotality’s Q2 2026 Rental Review put the national median at $705 a week with vacancy at 1.6 per cent, Sydney highest at $841, Perth at $784, Brisbane at $734 and Melbourne the cheapest big capital at $641. City by city detail is in our Q2 2026 rents review, and the same figures anchor our guide to buying an investment property. The two-year column is simply each weekly figure multiplied by 104 weeks. It assumes the rent stays flat for the full term, which is a simplifying assumption rather than a forecast, and it ignores moving costs, bond and the rest. It is an illustration of scale, not a quote.

Weekly rents are the Cotality Q2 2026 medians as published in our Q2 rents review. Two-year totals are weekly rent multiplied by 104 weeks with no rent change assumed. They are not forecasts and not quotes.

Two things stand out. First, the national figure is the size of a serious deposit in several markets, which is not an argument for buying, only a reason to check the alternative before committing. Second, the spread between cities is wide enough to change the answer: two years of Melbourne rent is about $20,000 less than two years of Sydney rent, and Melbourne is also the big capital where purchase prices sit closest to affordable, a point our rents review makes in detail. The question the table sets up is not “should I buy” but “what else could this money do”, and the next section takes the three honest answers in turn.

Keep Renting, Rentvest, or Buy? Three Honest Paths

Path one: keep renting, with more security

Renting is the right answer more often than property commentary admits, and a two-year standard would make it a better answer for the people it already suits. If there is a real chance you move cities for work in the next couple of years, the upfront costs of buying, stamp duty and the rest, are hard to recover on a short hold. If the deposit is not there yet, borrowing is not an option this year regardless of what rents do, and the honest plan is a savings target with a date on it. If your income is in transition, a new role, a probation period, a business in its first years, then renting keeps your options open while the file matures. In each of those cases a longer lease is a gift: it removes the annual uncertainty without asking you to commit capital you do not have. The one thing to avoid is treating “keep renting” as a default rather than a decision. Check the alternative, then choose.

Path two: rentvest

Rentvesting means renting where you want to live and owning an investment property where the numbers work, and a secure two-year lease on the renting side fits it unusually well: stability where you live, and an asset somewhere else. Our plain English guide to rentvesting walks through a worked rent here, buy there scenario in dollars, and our fastest-growing cities data companion maps where the jobs and the growth are moving if you are choosing a market rather than a postcode. The tax point has to be said in one sentence: a property you own but never live in is never your main residence, so the capital gains tax main residence exemption generally does not apply to it, and that is a question for your accountant before you buy, not after. The rentvesting guide also covers how buying an investment first can affect first home buyer concessions in some states, which is worth checking against our state-by-state first home buyer guide before you commit.

Path three: buy

Buying is the right answer when three things line up: a deposit that works, borrowing power that supports the purchase comfortably rather than at the edge, and a horizon long enough for the upfront costs to make sense. If you are a first home buyer, start with our first home buyer guide to every grant, scheme and stamp duty saving by state, which is kept current and is a better source than any summary here. If you are weighing an investment purchase, our city-by-city guide to investment property deposits puts the deposit in dollars rather than percentages, and our step-by-step guide to buying an investment property covers the order of operations from borrowing power to settlement. If the whole subject is new, our absolute beginner’s guide to mortgages assumes nothing and explains everything in order. For scale only: on Cotality May 2026 medians as published in our rental yields guide, two years of Melbourne rent at $66,664 is roughly 8 per cent of the $813,000 Melbourne median dwelling value, and two years of Sydney rent at $87,464 is roughly 7 per cent of the $1,283,000 Sydney median. That is our arithmetic, not a deposit recommendation, and it says nothing about what you can borrow.

What Longer Leases Would Mean If You Are the Landlord

The LinkedIn discussion split along predictable lines, so here is the balanced version. The case for a landlord is real: every tenant turnover carries vacancy between tenancies, re-letting costs and the time spent finding the next person. A two-year default reduces how often that happens and makes the income stream easier to plan around. The case against is equally real: a longer committed tenancy means less flexibility to sell with vacant possession, to move in yourself or to house a family member, within whatever notice rules the state tenancy law sets. Which side of that trade you prefer depends on why you hold the property and how long you intend to hold it. Investors holding for a long horizon tend to value the certainty; those who may need to sell or occupy sooner tend to value the flexibility.

On the lending side, the general position is simpler than the debate suggests. Lenders count rental income in servicing, usually at a shaded portion of the gross figure rather than the whole amount, and they typically want evidence such as a current lease or a rental appraisal. A two-year lease is stronger evidence of continuity, and stable, documented income is always easier to present than income that has to be explained. It is not, in itself, a change to how any lender shades rent, and policies differ enough that this is a file-by-file conversation. If you are weighing a purchase, the tax treatment matters as much as the lease: our negative gearing explainer covers the post-Budget rules, under which established properties bought after 12 May 2026 have rental losses quarantined while new builds keep negative gearing from 1 July 2027. Our rental yields guide ranks the capitals on gross yield against the cost to hold, and our guide to using equity covers how existing owners fund the deposit without selling. Nothing in the ACTU proposal changes any of that arithmetic today.

The Honest Bit: Nobody Should Buy Because of a Headline

Everything above is a way of taking a news story seriously without letting it make a decision for you. The proposal may be adopted, adapted or shelved, and this article does not predict which. Rents may rise or fall from $705 a week, and this article does not predict that either. What is true in every version of the future is that the right move for you depends on your borrowing power, your deposit and your horizon, and none of those is published in a media release. Two years of rent is a decision, not a default. If the honest numbers say renting is right, a longer lease makes that a better place to be. If they say buying or rentvesting is within reach, the same two years look very different.

The practical step is small. A conversation with a former banker at Everstone Finance costs nothing: it establishes what you could borrow today, what a deposit actually needs to be for the markets you are considering, and whether the answer is “go”, “wait”, or “keep renting and save”. The lender pays the broker on settlement, and a file that is not ready is told so plainly. That conversation is worth having before you sign anything for two years, whichever way the proposal goes.

Frequently asked questions

What is the ACTU actually proposing on rental leases?

The ACTU has proposed a national tenancy standard of two years. Under the proposal, landlords would be required to offer at least two years of housing security as the default, and renters would still be free to choose a shorter lease. The package also includes stronger protections against unfair evictions and rent gouging, and a lift in public housing construction to one in ten new homes. It was put to the Federal Government on 19 August 2026.

Is a two-year lease now the law in Australia?

No. As at 21 August 2026 it is a proposal from the ACTU to the Federal Government, to be delivered through National Cabinet by updating the 2023 A Better Deal for Renters agreement. The Housing Minister told the ABC the ideas would be considered but are not government policy. No tenancy law has changed, and any lease you sign today is governed by the existing rules in your state or territory.

Would renters be forced into two-year leases?

Not under the proposal as published. The ACTU media release says renters would still be free to choose shorter leases. The two-year term is framed as the default standard that landlords must offer, not a minimum that tenants must accept.

How much does two years of rent cost in Australia?

At the national median of $705 a week, as published in our Q2 2026 rents review using Cotality data, two years is 104 weeks and $73,320. Using the same medians, Sydney at $841 a week comes to $87,464, Perth at $784 to $81,536, Brisbane at $734 to $76,336 and Melbourne at $641 to $66,664. Those totals are our arithmetic, assume no rent change over the term, and are illustrations rather than forecasts.

Should I buy instead of signing a two-year lease?

Not because of a headline. Buying makes sense when your deposit, your borrowing power and your time horizon all line up; renting, with or without a longer lease, makes sense when one or more of them does not. A conversation with a broker costs nothing and tells you which situation you are in, including the honest answer that it is not yet time.

How do lenders treat rental income from a long lease?

Lenders generally count rental income in servicing at a shaded portion of the gross figure rather than the whole amount, and they typically ask for evidence such as a current lease agreement or a rental appraisal. A longer lease is stronger evidence that the income will continue, but it does not by itself change how a lender shades rent. Policies differ between lenders and are checked file by file.