Whenever rent control laws have been enforced in Australia, there have been long queues for those seeking housing. As the government artificially creates low rents below market equilibrium, this induces increased demand. Yet supply does not expand to meet the rising demand because of the low government mandated rents. The result is a shortage of housing. As Thomas Sowell observes in his book Basic Economics, “Nine years after the end of World War II, not a single new building had been built in Melbourne…because of rent control laws there which made buildings unprofitable” (p. 26).
Given that most economists — whatever their ideological disposition — agree that price controls are a bad thing, I was surprised to learn that rent control still exists in Victoria under the Landlord and Tenant Act 1958. To find out how extensive the rent control program is, someone will need to go through the regulations passed under the Act, a time-consuming and tedious process. Research for someone else to do!