A new study by led by UNSW has revealed that age is one of the biggest predictors of whether someone will experience housing stress in Australia. The study, which is based on data from Household, Income and Labour Dynamics in Australia (HILDA) Survey found that young adults under 25 are 214% more likely to struggle with housing costs than Australians over the age of 65.
The study defines housing stress as as anyone in the bottom 40% of income distribution who spends more than 30% of their before-tax income on housing costs. Young people are revealed to be most likely to fall within this group, with people aged over 65 the least likely.
In the past 12 months, Sydney rents recorded the steepest ever annual growth. Experts warned of a rental crisis across Sydney towards the end of 2022, as rental affordability index data painted a worrying picture.
SQM Research reported that rents across Australia have risen another 2.4% on average in the past 30 days, with vacancy rates dropping even lower, which they say is most likely due to an increase in demand from international students. Sydney housing vacancy rates dropped from 2.4% in January 2022 to just 1.4% in January of 2023.
“Different critical life events occur at different ages, which can have an impact on household income and push people into housing stress,“ said Dr Milad Ghasri, lead author of the report from UNSW Canberra.
No safety net for young Australians
Professor Hazel Easthope, Deputy Director of UNSW’s City Futures Research Centre and a report co-author, explained that young people often don’t have safety nets to rely upon when they are faced with high rents.
“Life events that impact housing stress can occur more rapidly for younger people who have not had a chance to build up the safety net to fall back on, such as savings from their career or support systems” Easthope said.
Easthope also said that renters are much more likely to experience housing stress than home owners, and also less likely to recover from it.
“Renting is much more insecure than homeownership. It’s a particularly insecure tenure in Australia, more so than in many other countries, because of our limited protections for renters, including allowing no grounds terminations and unlimited rent increases,” she explained.
Rental tenancy laws in Australian can sometimes be more beneficial to landlords than tenants, and can exacerbate housing stress for renters. The Greens introduced a bill to NSW parliament last year that would amend the Rental Tenancies Act and bring an end to no ground evictions, however, the bill was struck down.
With cost of living continuing to rise, and many Sydney residents facing soaring rental costs, the UNSW study highlights just how precarious housing is for many young Australians.
Dr Gharsi says the data shows that a “significant shortcoming of housing assistance” that is currently in place is often only available “once someone is in urgent need”.
“Rather than stepping in once someone is already struggling, we can use modelling to shape early intervention policies, which may reduce the need for long-term assistance” he said.
