“The lack of affordable and suitable rental options when living alone is likely to be implicated in these complex housing dynamics over time, contributing to a more enduring structural change of who can afford to rent independently without a second income to rely on,” the report said.
Low-income earners could only afford to pay $225 per week in rent, study author and Swinburne University of Technology researcher in urban and regional planning Margaret Reynolds estimated, and it was impossible to find rental properties for that price, especially in Sydney and Melbourne.
Rents have jumped since the research period. Sydney’s median unit asking rent is $680 per week, up 17.2 per cent in a year, and Melbourne’s is $520, up 15.6 per cent, on Domain figures.
“They definitely need to earn a higher wage to be able to afford to rent,” Reynolds told this masthead. “It all goes back to supply and what is available for people on low incomes and there just isn’t anything.”
Adult children were now living at home for longer, Reynolds said, while older tenants had usually gone through a marriage breakdown, illness or loss of income, a trend that started before COVID-19 hit.
“It’s a crisis. “I’ve been working in this area for 20 years, and I’ve never seen so much media coverage of these issues,” Reynolds said.
Far more social and affordable housing was needed, Reynolds said, as the private rental market could not make up for the shortfall for those most in need.
Single tenants are leaving the private rental market at a rapid rate.Credits: Oscar Colman
Australia Institute senior economist Matt Grudnoff said the problems for single renters had followed a similar trend to home buyers hoping to purchase solo, which had become much tougher over the past 10 to 15 years.
“Renting has caught up to that,” Grudnoff said. “Now it’s getting the same way – if you haven’t partnered up it can make it much more problematic.
“It really highlights that we have a national housing problem.”
Grudnoff said Australia’s two major parties had only been “tinkering around the edges” of the housing crisis, and introducing policies like accessing superannuation to buy a house was “a terrible idea.”
House prices will be pushed higher by shared equity schemes, economist Matt Grudnoff says.Credits: Oscar Colman
The shared equity schemes on offer in some states and soon federally meant house prices would be pushed higher, rather than making significant changes to housing supply, Grudnoff said.
More needed to be done by the government, including changing tax concessions for investors such as the capital gains tax discount, as well as ensuring there were more homes built, he said.
“We have to stop the pushback against median density zoning in middle ring suburbs in capital cities,” he said.
Australian Council of Social Service CEO Cassandra Goldie said low-income earners were in serious distress, with some forced to cut back the amount of life-saving medication they took.
“To meet their soaring rental costs, people have told us they are doing things like eating one meal a day, turning off the fridge at night to save electricity, and cutting diabetes medication by half to make it last longer,” Goldie said.
In worst-case scenarios, people were being forced to sleep in their cars or tents.
“This should not be happening in one of the wealthiest nations in the world,” she said.