With more than 6 million Aussies renting, stress is rising

With more than six million in rental accommodation, the incidence of rental stress among low-income house holds is rising.

A blank red and white for rent sign is posted in the front yard of a home.

Once seen as a stepping stone to home ownership for young people, private rentals are increasingly the long-term norm for families with children, new figures show.

While this works well for most of the 6.3 million renters in Australia, many on low incomes are becoming “stuck” in rental stress for years at a time and with vulnerable tenure, the Productivity Commission warns in a research paper to be published on Wednesday.

Private rentals make up 25 per cent of the nation’s total housing stock, up from 20 per cent in 1996, reversing the downward trend for rentals since World War II, the paper, Vulnerable Private Renters: Evidence and Options, finds.

The increase has been driven by low-income private renters (those in the lowest 40 per cent of incomes), who have doubled in number over the past two decades to 2.65 million people.

“More low-income households rent privately than ever before, in part because home ownership and public housing have become less attainable,” economist Jonathan Coppel of the Productivity Commission said.

“Most spend more than 30 per cent of their incomes on rent (commonly considered the benchmark for rental stress), and many spend much more,” he said.

“Figures show 170,000 households have less than $250 available each week after paying rent.”

 

The report notes how “sticky” rental stress has become for many people on low incomes. Almost 50 per cent of those considered in rental stress in 2013 were still in rental stress four years later.

The report found renting offered a desirable option for many Australians, providing flexibility and good value. Affordability for private rentals remained steady compared with income over the past 20 years, unlike home ownership. And renters were generally satisfied with their housing. But instability was one of the risks.

“More families with children are renting, as well as people with a disability, and retirees. The costs of eviction can be high for these households,” Mr Coppel said.

Australian Council of Social Service director of policy Jacqueline Phillips said rental stress “too often leads to homelessness”.

“We regularly hear from people on low incomes that they are forced to choose between keeping a roof over their head or food on the table,” Ms Phillips said.

Sydney mother Kristie Hoskins, 40, said home ownership would mean stability for her and partner, Mark, six-year-old triplets Parker, Oliver and Matilda, nine-year-old Jaydon and 22-year-old Jet: “With renting you never know when you can be evicted for no reason, it’s unstable.”