Australia's Rental Crisis

The Anglicare's annual Rental Affordability report (rental snapshot looking at 45,000 available properties) revealed just how few vacant properties there are to rent and how unaffordable they are. "After thirteen years of producing the Rental Affordability Snapshot, it is clear that housing in Australia is broken," the report said.

Over 500,000 people left the country during the pandemic. Closed national borders prevented immigration and tourists from coming in.

With people leaving the country, Australia should have experienced many more properties available for rent. This has not occurred.

Causes for a lack of rentals-:

• investors have withdrawn from the market (about 20% of properties for sale are investors who are selling properties)
• only around 8% of them (investor sales) are being bought by people who want to invest in housing and then rent it out
• fewer houses available for rent
• currently around 130,000 properties available for rent in Australia (10 years ago 170,000) - reduction of 25%
• around 12% of the houses at the moment that are going to be sold are going to disappear from the rental market
• COVID lockdowns caused people to want a better or larger house
• discretionary income redirected from OS trips/shopping to housing and renovations during COVID
• return of short stay accommodation for tourists

The number of houses that are affordable has diminished

The definition of affordable housing is housing that only costs you 30% of your income, the other 70% you need for living expenses.

'Housing in Australia is broken: only 1.6% of private rentals are affordable for those on minimum wage

Guardian Australia - Rental Affordability

If you're on some of the other welfare payments such as the age pension, or job seeker benefits, less than 1% of the properties across the entire nation would meet the definition of affordable. So what's happening is people are living in very unaffordable housing. They're making terrible choices moving further away from their family, further away from jobs and services, just so they can keep a roof over your head.

ABC News

Inflation - cost of living rising

When it comes to the cost of living, housing is the number one cost per household whether that's rent or mortgage, and those costs are going to go up. There has been very little from the federal government to address this, not on a structural level.

Southport Real Estate Agents report a rise in homelessness on the Gold Coast. Fox's also provide property management. Affordability is really an issue on the Gold Coast. $2 million dollar units on the beach are doing nothing for the rental crisis.

Inheritocracy

An ABC Radio National Program Thu 12 Oct 2023 Inheritocracy: The lasting generational advantages of home ownership used the term "Inheritocracy".

The article mentioned the "landed gentry where we'll have the the homeowners and the renters".

Government Policies and Support Systems

Actually it was a whole range of government policies and support systems that really set Australia on that pathway to enable everyone to become homeowners through the 20th century.

Hard work has featured in this transformation of homeowners, however now hard work would not necessarily give the same advantages as those previously enjoyed.

The bank of mum and dad is featuring in housing affordability.
Dr Monique McKenzie mentioned 3 types of parental assistance-:

1. So there's direct transfers, where parents just give a certain portion of a deposit.

2. There's the guarantor where homeowning parents leverage their own property. So mortgage holders can then essentially borrow up to 100% of the value.

3. And then there's what we call inkind transfers, which is where parents allow their children to live at home rent free.

Related articles

• How many properties sit empty
• Tree Changers & Sea Changers
• What Returns could I make from Property Investment
• Housing Affordability in Australia
• Why are housing prices rising faster than wages?