Kyle Ward wants to own a home. He and his wife have been saving hard, living in a cheap rental in Ipswich, Queensland for three years. Paying $365 rent a week, they were saving everything they could.
Ward, 36, earns $68,000 a year and his wife, 34, is a carer for her mother. She gets the pension – just over $1,000 a fortnight.
Saving was going well until their landlord decided to sell – to another investor who wanted to divide the property into individual rooms to rent out separately, he said.
“We managed to find a replacement property at $640 a week,” Ward said. “But on the salary I am on, savings are just a dream now.”
With steep rents, and no bank of mum and dad to help, the couple have given up their dream of ever buying their own home.
“Your parents go on and on about buying a home, but it’s never going to happen, people blame our habits but ignore the cluster they have made with their greed.”
Ward and his wife are not alone. New research from the Australian Housing and Urban Research Institute (AHURI) has found three in five Australian renters expect to never own their own home – a significant shift that requires rethinking of tax and housing systems, it said.
It comes as a new survey from Better Renting revealed the magnitude of rent increases that tenants have been hit with in the past 12 months, with half of rent increases in sitting tenancies over 10% and one in six more than 25%.
Using data from the last census, the Australian Bureau of Statistics, and the Australian housing aspirations dataset, the AHURI report showed four out of five renters (78%) aspire to be homeowners.
On top of this, 51% of tenants rented because they did not have enough money for a home deposit, with 41% saying they could not afford to buy anything appropriate.
The AHURI lead researcher, Prof Emma Baker of the University of Adelaide, said Australia was about “to flip” from a nation of homeowners to a country of renters.
“We’re expecting in the next census that there will probably be more renters than there are outright homeowners in Australia. Which is a big social shift.”
Between 2011 and 2021 the proportion of people renting increased in all age brackets. Over the next 20 years, rental rates are expected to keep growing with outright home ownership forecast to fall from 67% to 63%.
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“The policy challenge is to make renting a good, long-term, stable housing tenure for renters, particularly for lower-income, older renters with limited superannuation,” Baker said.
Surveying 1,058 renters around the country, Better Renting found 76% received an increase notice in the previous 12 months. The survey found eight of 10 people in that group ended up paying the full amount of the increase.
While the report found one in 10 renters were able to negotiate their rent increase, the eventual increase ended up being about the same size as a typical rent increase. Just one in 268 renters who got a notice of rent increase successfully opposed it.
Joel Dignam, the executive director of Better Renting, said negotiating a lower rent increase takes a lot of work and, outside the Australian Capital Territory, there are effectively no limitations on rent increases.
“When you see these big rent increases, it’s a symptom that the rental system is not working,” Dignam said.
“Policymakers sometimes act like this problem is fiendishly complex, but actually it’s pretty simple. The hard part is having the courage to act,” he said.
