Australia’s private rental market works well for most people, most of the time. The market has adapted to a fast-growing population as well as to several structural shifts — stemming from the coincident rise in house prices as well as to the declining availability of social housing. These forces have culminated in an increase in the share of the population renting privately since the mid-1980s — a reversal of the long run decline in this share since World War II. Once considered a short-term form of tenure for young people, more families with children are renting nowadays, and they are renting for longer periods.
However, there are concerns with vulnerable private renters, most of whom have low incomes. Many vulnerable private renter households struggle with rental affordability. Two-thirds spend more than 30 per cent of their income on rent — the commonly used benchmark for identifying ‘rental stress’ — and many spend much more. 170,000 households have less than $250 available each week after paying rent. The Commission’s research paper examines the experiences of vulnerable people in the private rental market. It also discusses policies that affect outcomes for vulnerable renters
MEDIA RELEASE: Affordability is the key challenge for a growing number of vulnerable private renters
Private rental market affordability has remained steady in Australia, but there has been a rapid rise in the number of low-income renters.
A Productivity Commission report [Vulnerable Private Renters: Evidence and options] found the private rental market works well for many of the 6.3 million people renting, with rent paid compared with income steady, and the supply of rental properties increasing by more than one million over the past two decades.
But the number of low-income households in rental stress has doubled in the past two decades.
“Increasingly, we see families stuck in rental stress. We found that over 600,000 households are in rental stress, that is, they spend more than 30 percent of their incomes on rent. Of these, around 170,000 families have $35 a day or less left for all their other expenses after paying rent,” Commissioner Jonathan Coppel said.
“More low-income households rent privately than ever before, in part because home ownership and public housing have become less attainable,” Commissioner Jonathan Coppel said.
Half of households who experience rental stress successfully escape within 12 months, generally through securing higher paid work. But, the other half still experience rental stress four years later, the report found.
“Poor rental housing outcomes are a key driver of disadvantage. There has been a lot of discussion lately about whether income support payments are high enough.”
“The role of Commonwealth Rental Assistance in addressing disadvantage has not really been part of those conversations and there is merit in looking at whether raising the level of rental assistance would be effective,” Commissioner Coppel said.
The report found that more families with children are now renting, as well as people with a disability and retirees.
“Around 1 in 5 moves are involuntary, often as a result of the landlord selling their property, and the costs of eviction can be particularly high for vulnerable households. Having 30 days to find new accommodation if you are elderly or have family responsibilities can be very difficult,” Jonathan Coppel said.
SOURCE: Productivity Commission. “Vulnerable Private Renters: Evidence and options.” Productivity Commission, 25 September 2019.
Media requests: Leonora Nicol, Media Director – 0417 665 443 / 02 6240 3239 / email@example.com
See also: ACOSS brief: “How to reduce homelessness and boost incomes and jobs: Social housing as infrastructure.” August 2019
Produced by the librarians at the Brotherhood of St Laurence in Melbourne, Australia