If you’re renting today, there’s a good chance you’re under what’s known as ‘rental stress’. In fact, a lot of Aussie renters are struggling to make ends meet.
The vast majority of Australian tenants say they are paying more than a third of their weekly income in rent, a new Rent.com.au survey has found.
The Rent.com.au Rental Affordability Survey of more than 2,000 renters across Australia in April revealed that 53 per cent of tenants reported spending one-third to a half of their weekly income on rent. Rental stress occurs when a person pays more than a third of their income on rent.
More worrying is that, according to the survey, 30 per cent of tenants are experiencing extreme rental stress by paying more than half of their weekly income on rent. Some tenants (23 per cent) said they had previously been late in paying rent due to financial strain.
One participant in the Rental Affordability Survey, Stefanie, from Redfern, NSW, works full-time as a legal secretary and spends more than a third on her income on rent.
“I moved from Perth to Sydney last year for work and the rent is ridiculous, particularly up here in Sydney where everything is more expensive. It’s so terrible I have had to have a discussion with my employer about trying to meet all my financial obligations,” she said.
The Rent.com.au Rental Affordability Survey also found that:
- 60 per cent of tenants thought their rent was overpriced for the property / area they lived in, while 36 per cent thought their rent was fair and 4 per cent considered it a bargain.
- 59 per cent of respondents said they would move to a new house if their rent was raised at the end of their current lease, while 31 per cent said they would try to negotiate but would likely accept an increase, and 10 per cent said they would accept an increase without question as “rents are expected to rise every year”.
- The majority of respondents (70 per cent) said they were renting because they were unable to afford a house, while a growing minority (13 per cent) said they were happy renting and not interested in owning property.
Another survey participant, Hollie, from Sydney, NSW, said the Sydney market was appalling.
“I work more than 40 hours a week, am trying to study full-time and make something of myself – and yet all my money goes towards bills. I am constantly financially stressed with no hope of travelling anytime soon. I don’t live a lavish lifestyle and rent in cramped shared accommodation. I’m not sure how renting in Sydney is sustainable – I’m struggling so much, along with a lot of young people I know – and no one seems to care.”
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Elliot, who works full-time running a childcare centre in Hervey Bay, QLD said renting is tough for young people today.
“I’m 25 years old and pay $230 each week for a run-down unit far from the town centre. $230/week is about the lowest rent available in my area. Even though I’m working full time and in the highest position possible at the childcare centre, I can barely afford rent. The cost of living (bills, food, petrol, etc) and rent on top is almost unbelievable.”
Is there evidence of a more financially irresponsible generation?
The Australian national accounts compiles the spending habits of Australians and a measure of ‘household final consumption expenditure’ – data that goes back to 1959. The results show a ‘snapshot in time’ look at the spending habits of the average Australian household.
Today, housing costs take up more than 20¢ in a dollar spent, a cheaper food only 10¢. Households today spend more on education and health, but far less on cars, household goods and clothing. In 1960, the biggest component of household spending was on food – it made up around 20¢ of every dollar spent.
The share of spending today that goes to cafes and hotels has also dropped from figures in 1960, dropping to $7 for every $100 spent down from $9.
Leases and living arrangements
More than half of the Rent.com.au survey participants (60%) said they had been in their rental property less than one year. Only 17% had been in their current rental for more than 3 years, 13% were in their second year and just 10% 2-3 years.
Of those surveyed, 34% said they were living in their rental with their family (partner and kids), while a quarter were living alone. Just 20% live with their partner and 9% in shared accommodation.
Where do you sit on the rental stress issue? Let us know in the Comments below