Get the government to own enough homes that they have a 5% vacancy rate, scrap the tax incentives to be a landlord (no negative gearing or CGT), keep current or a bit better tenancy rights and we probably don't care what % of homes are owner occupied/rentals.
The legal/financial balance being so heavily in favour of landlords is 90% of our problems.
When you can just move into a government home with no wait, market forces aren't a big problem, they are probably good.