At their home in Balmain in Sydney’s inner west, Jamie and Stephanie Dunk have introduced a novel character into their two sons’ lives: the landlord.

Their eldest, Aubrey, 6, has many questions.

“We’ve had this conversation a few times, where he will ask about what the landlord owns,” Stephanie says.

“So, like, the wall, is that owned by the landlord? Yep. The toilet? Yep. What about the couch, is that owned by the landlord? What would the landlord think if we did this? Are we allowed to do this?”

This week, the Reserve Bank cut Australia’s official cash rate by 0.25% to a new record low of 0.75%. It should be good news for prospective home buyers; the cost of borrowing has never been lower.

But after a brief reprieve, house prices are on the climb again. In Sydney and Melbourne, prices jumped by 1.9% in September. In Sydney, home values have increased by 3.6% in the last three months alone. With prices likely to continue their upward trajectory on the back of the rate cut, an increasing number of Australians have little to be excited about.

“You’ve seen the price of houses effectively double over the last few years, and the big thing I’ve seen in that time is that just about everybody needed help from their family to get that deposit,” Bruce Carr, a mortgage broker from Sydney’s west told Guardian Australia.

“The way I described it was that first home owner benefits have effectively been privatised. In other words, if you were from a wealthy family you could enter the market. If you weren’t, you couldn’t.”

It means that for more and more Australians, renting is a long-term reality. Once the preserve of students and low-income households, private rentals now make up one-quarter of all Australian households. More people are renting for longer and the demographics of renters are shifting.

As a report from the Productivity Commission released last week showed, the Dunk family are part of the fastest growing cohort of renters in Australia: couples with children.

“I don’t know that we’ll ever buy a home,” Stephanie told Guardian Australia this week. “We originally began saving expecting we would and we went to a couple of auctions where we’ve bid. I think there is probably still a strong desire to own among our generation, but I think mostly people have given up on the dream because of how distant it is.”

That feeling – shared and discussed among an increasingly large proportion of Australians – raises some difficult questions.

Private rentals now make up one-quarter of all Australian households. Photograph: georgeclerk/Getty Images

Are tenancy laws, designed at a time when renting was seen as a short-term housing solution before transition into ownership, fit for purpose? How does renting impact on the way we live our lives into full-time adulthood? And what happens when a generation of renters can’t live off their home equity into retirement?

In March, the Tenants’ Union of New South Wales released a report that shed light on the way tenancy laws shape and affect renter’s lives. It found renters craved security of tenure above all else, that three-quarters of renters avoided reporting problems with their properties, and that the fear of a “no grounds” eviction was a significant source of anxiety for many.

“The other side of that is people reporting not so much anxiety but apathy,” Leo Patterson-Ross, a senior policy adviser at the Tenants’ Union said. “They’ve sort of given up expecting anything better from their landlord or real estate agent, and that’s largely because of the inability or unwillingness of governments to demand anything better.”

It’s a feeling the Dunks know well. Before moving to their terrace house in Balmain earlier this year to be closer to their son’s school, they lived further west in Ashfield in a private rental managed by their landlord.

“There’s this base level of anxiety in renting,” Jamie says. “Not wanting to call in any issues because you know the landlord would show up and poke around.

“We’ve had toddlers the whole time and some of that anxiety passes from us to them.

“You know, a common point of contention between parents and toddlers is drawing on the walls. But it adds another element to the dynamic when there’s a landlord involved.”

Stephanie and James Dunk with Ira, 3, and Aubrey, 6. They moved to their terrace house in Balmain to be closer to their son’s school. Photograph: Lisa Grant Photography

Patterson-Ross says part of the problem is the ways the laws are drafted. While tenancy legislation assumes both parties – the tenant and the landlord – are equal, it fails to recognise the power imbalance in the relationship.

“Basically if the two parties can’t reach an agreement on something, one party faces significantly greater harm,” Patterson-Ross says. “The landlord faces losing profit until they find someone else to take the property, the tenant faces not having a roof over their head.”

For the Dunks, renting over buying is mostly a choice. Renting offers the flexibility to move cities if their careers require it, and they reason the rent they pay is roughly equivalent to the interest they would pay on a mortgage. They choose to save in order to replace the equity they would have in a home with capital.

But things like no-fault evictions and the tendency to short leases means choosing to rent comes with significant disadvantages.

While many European countries place controls around rent rises, give tenants the ability to negotiate longer leases and offer greater security of tenure, in Australia the tendency to short or periodic leases and the power to evict tenants without grounds means renters are at least implicitly disadvantaged.

“Of course the price is definitely part of why we haven’t bought [but] we also want to challenge the idea of owning your own home as something that’s part of your identity,” Stephanie says. “But it would be great if along with the renting lifestyle we could have some stability.

“We often try to look for long-term leases [but] long term generally means 12 months. And there’s other things, too. It would be nice to be able to do things to improve the property, hang a picture, potentially paint a wall, to have those touches so you feel like it’s your own space and don’t always have it in the back of your mind that it isn’t yours.”