Cat lived in her dream location. Then she was forced out – and in with her boyfriend

The average Victorian worker cannot afford to rent a typical one-bedroom apartment in Melbourne, analysis shows.

To find a home to rent, they would have to go further afield to one of just 24 middle or far-flung markets where median asking rents are below what is considered affordable for the average weekly salary.

Cat Dunn said she felt she’d been pushed into a life decision because of rent rises. Credit: Justin McManus

Spiralling rents have caused Melburnians to make difficult decisions about their living situations, such as moving in with partners earlier than they’d like or moving into a share house when it no longer feels suitable, renters and experts say.

The average Victorian can afford to spend $437.73 per week on rent, if they earn the average weekly total cash earnings ($1459.10) and pay the maximum amount on their housing costs before the Australian Bureau of Statistics considers them in housing stress (30 per cent).

The median asking rent for a one-bedroom apartment in Melbourne was $480 in the June quarter, on Domain data. Suburb-level data show there are just 24 areas where houses or units were affordable to the average Victorian, many of which were outer suburbs.

Domain chief of research and economics Dr Nicola Powell more people were choosing to live alone, and declining affordability put many renters in a difficult position.

“The feasibility of someone wanting to live on their own is pretty slim, financially. There will be many individuals who … are well exceeding that 30 per cent marker and their income is being zapped by rent,” she said.

“Affordability is pushing lower income households to those outer locations if they want to live on their own. This is where the compromise comes in, where tenants are getting a housemate.”

Rising rents caused South Yarra renter Cat Dunn to give up her dream of living in the inner city and move in with her boyfriend sooner than she would have otherwise liked.

“This was my first chance to live by myself and I’ve loved it,” the 38-year-old online business manager said. “We both want to live alone but we can’t. We’ve been forced to take the next step in our relationship before we’re ready.

Dunn felt increasing rents without improving a property was unfair. Credit: Justin McManus

“It would have been nice to have the option when I was ready and not when my lease was about to end.”

Dunn’s boyfriend lives in Bonbeach – 31 kilometres from Melbourne’s CBD – where the median asking rent for houses is $650 and $498 for units, both up more than 30 per cent over the past five years.

Dunn’s landlord lifted the rent on her South Yarra unit by about $350 per month in the two years she lived there. She felt the amenity of the unit declined as nearby construction noises grew and repair requests were slowly acted on.

“It was an old art deco. It was pretty run down and [the rent] seemed pretty reasonable,” she said. “South Yarra is a very desirable place but what I’ve had to put up with to live here was disgusting.

“I’ve had less and less value from it, it’s really hard. I feel like I’m being taken advantage of.”

The Demographics Group co-founder Simon Kuestenmacher said people should be able to live alone in a home and location that suits them.

“You will make more and more of your decisions based on price rather than personal circumstance. For lots of people the shared living arrangement is quite nice,” he said. “Sometimes people are just over it and not everyone wants that – and we’re pricing people out of those options.”

Kuestenmacher said rents could be brought down by adding more rental stock, and wants governments to encourage more build-to-rent developments.

“It was always cheaper to share with roommates but just because the general price goes up, more and more you price out more people from [living alone],” he said. “Even worse, people live in one-bedroom apartments and pay 45 per cent of their income on it.

“You get stuck in a rut … you feel cheated out of what would be a good life for you and it makes you angry. It also threatens democracy to a degree.”

Better Renting executive director Joel Dignam said it had become more difficult to live alone.

“Things have been getting harder and harder for people,” he said. “There was a bit of a moment four years ago when renters had some breathing space, but since then things have been getting worse.”

Dignam said the rising cost of rent was affecting single renters’ wellbeing. “What we hear a lot is people being stuck in their current situation,” he said. “Sometimes the owners of these properties can be aware of that and feel no obligation to act legally.

“Some renters think, ‘I have to stay where I am because anywhere I turn could be worse or more expensive’.”