Ask any renter or real estate agent whether the Australian rental market is in a state of crisis, and there is a good chance they will answer with a resounding YES!
They may even prefix it with an expletive for good measure.
According to the PropTrack Housing Affordability Report of 2023, housing affordability in Australia is at its worst level for three decades. Indeed, it is now so low that households earning $105,000—the median national income—can only afford to rent 13% of all properties on the market.
While most people concur that the industry needs a significant overhaul, few people can agree on what that should involve.
But what is clear is that the present Australian rental market is failing its citizens. Here are eight ways in which that is currently happening.
1. Skyrocketing Rent Prices
One of the most obvious issues with Australia’s rental market is the exorbitant cost of rent people have to pay on a weekly basis.
Sydneysiders are hit with the highest amount on average, having to fork out $750 a week for a place to live. Canberra residents come in second with $690, closely followed by Darwin ($660), Perth ($650), and Brisbane ($630).
These prices are being driven up by a lack of supply and high demand, which, in conjunction with the rising cost of living, is pushing an increasing number of Aussies to the brink of homelessness.
2. Lack of Affordable Housing
As alluded to, the rental market in Australia right now is not providing enough affordable housing options, particularly in cities and large urban centres.
While the construction industry appears to be steadily growing, the majority of new developments tend to focus on luxury apartments or high-end houses at the expense of those who need more affordable units.
This imbalance will be addressed in part by the Labour government’s $10 billion Housing Australia Future Fund initiative that aims to build 30,000 affordable homes in the next five years.
However, until this is complete, this disparity leaves many Australians, particularly young families and students, with few viable options for affordable, safe, and decent accommodation.
3. Lack of Accessible Housing
In addition to a general lack of affordable housing, there is also a distinct lack of accessible housing in Australia.
Currently there are around 180,000 wheelchair users in the country. According to a report by the Australian Human Rights Commission, most of its available housing does not properly meet their needs.
This is often due to unsuitable floor plans, poor access and factors such as bathroom configurations that make them problematic to use. Additionally, many of them might be in locations that make community participation difficult.
Although help is available through disability home care services with United For Care, there is no question that a lot more can be done to help Australians who require accessible homes.
5. Insecure Tenancies
In Australia, tenancy laws allow for short-term leases, usually of six months, (although sometimes less), which can leave renters vulnerable to eviction with little notice.
Effectively, this means they are only ever a short period of time away from potentially being homeless, which is an instability that can prey on people’s minds.
In addition, low-income renters, in particular, are often forced to accept eviction because they are less likely to be able to afford legal assistance if disputes arise.
6. Poor Housing Standards
Unfortunately, many Australian renters have little choice but to live in homes that are poorly maintained and potentially dangerous, as landlords sometimes neglect necessary repairs and upkeep.
Currently, the regulations are quite weak or unambiguous when it comes to the minimum standards that rental properties should adopt.
Subsequently, it leaves many tenants powerless to demand better living conditions, which often results in them having to live in subpar environments with outdated appliances or issues such as mould or poor insulation.
7. Lack of Rent Controls
Unlike some other countries, such as France and Germany, Australia does not have uniform rent control measures in which to protect tenants.
In view of this, in some states, landlords are free to raise rents as they see fit, often in a manner that outpaces wage growth and inflation.
Without controls, renters are left at the mercy of market fluctuations, and unscrupulous landlords. Sadly, there is little they can do about it.
8. High Competition for Rentals
Last year, video footage emerged online of over 150 people queuing up to view a rental property in Sydney. While this is an extreme example, it does illustrate how fierce competition is in Australia’s tight rental market.
The high competition makes it incredibly difficult for individuals with lower incomes, young renters, and even families to secure a place to live.
This is particularly true when they are up against others who can provide landlords with incentives, such as paying 12 months of rent upfront.