Australian renters were noticeably ‘underwhelmed’ by the announcements in this year’s Federal Budget, feeling ‘abandoned’ by the lack of measures to improve housing affordability. Respondents called out for a greater focus on housing affordability going forward, Rent.com.au’s new survey reveals.
Rent.com.au‘s 2018/19 Federal Budget survey was sent to a sample of Australian renters. The survey covered three key areas: Budget awareness, key priorities, and sentiment around housing affordability.
Renters were asked if they were aware that the 2018/19 Federal Budget had been handed down the night before receiving the survey. 81% said they were aware of the latest Budget, while 19% were unaware of the news.
Rewind to last May when Scott Morrison delivered a housing package aimed at tackling housing affordability concerns. This housing-focused paper included a raft of measures designed to promote home purchasing in Australia, including the First Home Super Savers scheme, incentivisation of investment in affordable housing, supply-side packages designed to increase the stock of housing and removal of barriers to downsizing, expected to free up housing stock.
In light of last year’s Budget, renters were asked about their thoughts on the superannuation scheme announced in the prior budget for first home buyers. Just over half (51%) said they felt the scheme was a good idea, but an almost equal amount (49%) disagreed. Only 8% of respondents said they had taken advantage of the scheme announced 12 months prior.
RENTERS RANK IMPORTANCE OF KEY BUDGET PRIORITIES
In the second component of the Budget survey, renters were asked to rank the importance of key areas such as economy, housing, infrastructure, health, welfare, education, small business and energy.
The polling showed most Australian renters believed housing should be a key priority going forward. Of the eight priorities tested, housing received majority support among respondents.
In order of highest importance to lowest, priorities were ranked as following for Australian renters:
Scale | Most important: 1, Least important: 5
Small business (2.43)
SENTIMENT AROUND HOUSING AFFORDABILITY
As housing affordability was a major focus in the previous Federal Budget (2017/18), renters were asked to consider the change in affordability over the past 12 months. The majority (69%) believed housing affordability has worsened in the 12 months since, while 23% have seen no change. Just 8% believed they had seen some change in their area. Only 1% believed there had been a significant improvement.
Sentiment around the perceived change in housing affordability in the 12 months to come was overwhelmingly negative. 39% of renters said they felt housing affordability would be slightly worse in the 12 months to come, 26% said ‘much worse’, and 20% believed ‘significantly worse’. Just 15% of total responses felt affordability would be ‘better’ or ‘significantly better’.
But what will it take to improve housing affordability? Respondents were asked to consider the measures required to address the housing affordability issue in Australia and ranked the following accordingly:
- Reduce or remove stamp duty (51%)
- Purpose built housing for renters only (49%)
- More jobs in areas with lower-priced housing (42%)
- Improve transport options and commuting (35%)
- Release more vacant land (23%)
- Build apartments close to major work centres (17%)
People who rent and do not own property made up the bulk of the respondents in the Budget survey (79%), with just 7% owning their own home and another 7% renting but owning a property elsewhere (rentvesting). The remaining total (6%) claimed to have other living arrangements or said they lived with their parents.
Renters also indicated that home ownership was very important to them, desiring to buy their own home soon (53%), while 27% felt it was ‘somewhat important,’ indicating they would consider buying a home down the track.
46% of all survey respondents were aged between 40 and 55 years, 36% were 56 or older, 15% were aged 25-39, and just 4% of respondents were aged 18-24. Respondents’ locations fell in line with general population data with the bulk coming from NSW (30%), QLD (27%), VIC (23%) and the remaining 20% from WA, SA, TAS, ACT and NT combined.
DO RENTERS FEEL LEFT OUT? OR ARE THE TAX CUTS ENOUGH?
With such a concentrated focus on housing, it seemed the Government was finally starting to take the housing affordability issue seriously. Fast forward to 2018 and it looks like the focus on housing affordability was somewhat short-lived. Tax cuts stole the limelight this year, despite ongoing affordability concerns.
The $10-a-week tax cut for low and middle-income earners is what Scott Morrison hopes will fund what is effectively a ‘flat tax’ where 94% of the population pays 32.5% or less and meanwhile reducing the cost of living. (*Granted, in seven years’ time).
Feedback from Australia’s renters indicates the lack of acknowledgement that housing is an important issue was a bitter pill to swallow. The May survey asked renters for feedback on the announced tax cuts, and whether they felt they were enough to improve affordability by reducing the cost of living. Commentary from respondents indicated renters, first home buyers and people struggling to find a home feel “abandoned” by this year’s Budget and severely underwhelmed by the measure planned to ease the tax burden.