Decade-long leases will soon be possible under rent reform laws announced on Thursday, but landlords are unlikely to embrace them in a market with soaring demand.
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The state government has announced it will introduce new legislation this year to provide "greater security" for both tenants and landlords.
Current laws restrict any rental agreements to a maximum of five years but under the new rules there would be no "artificial cap", Premier Daniel Andrews said, when introducing the new reforms.
The looming changes, he said, will provide the same protections contained in current standard rental agreements for longer term arrangements.
"The lease can be as long as the tenant and landlord agree to with all the terms and conditions," Mr Andrews said.
The change is expected to be in place by 2018.
It remains to be seen if the new laws will provide real rental reform at a time when more than one third of households are renters, according to the latest housing occupancy figures released in 2015.
One-year leases are the norm for most renters in Victoria.
Rents are at record highs, rising faster than incomes, and the number of vacant properties is shrinking despite a building boom in the city.
Premier Daniel Andrews said families renting already faced enough stress without having to worry about finding a new rental property when leases expired.
"This change will give renters the chance to put down roots and landlords a more certain income," Mr Andrews said.
A website will connect renters with landlords seeking to reach long-term agreements.
Consumer Affairs Minister Marlene Kairouz said the website would function like a dating service to match up prospective tenants with property owners.
The Tenants Union of Victoria welcomed the announcement as a "good start" that reflect the "changing needs of the rental market".
But the union's policy advisor Yaelle Caspi said renters' rights should not be compromised in long-term leases. "There will also need to be fairer processes for rent increases and limits on lease breaking costs," she said.
Nelson Alexander Ivanhoe's Jason Pettit said demand for leases of more than five years would be extremely limited. It was difficult for landlords and tenants to know what their circumstances would be in 12 months, let alone five years, he said.
"If either parties locked themselves in for a period of that length, it could get them into more trouble than it's worth," Mr Pettit.
"I've had tenants request leases for two or three years on occasion - more often than not, the landlords refused and preferred to just do the 12 months with recurring renewals.
Landlords could be offered "incentives" to offer longer leases, such as requiring renters to pay maintenance costs, warns the Victorian Council of Social Services.
While the government has said that rental rights would not change, a discussion paper considered by the government review of tenancy laws suggests tenants could be asked to pay more more for upkeep.
"Longer term leases are a great idea, but renters rights must not be traded away in the process," said VCOSS CEO Emma King.
-with Christina Zhou and Kirsten Robb
