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New research from the Australian Housing and Urban Research Institute (AHURI) has positioned soaring house prices and rents as an unforeseen by-product of the COVID-19 pandemic.
Published earlier this month, the report, titled The impact of the pandemic on the Australian rental sector, found that throughout the second year of the pandemic — 2021 — over half of its research participants recounted financial struggle; however, some stated these burdens began earlier than the pandemic.
AHURI found that time is yet to heal many pandemic pains. Although being utilised by just 16 per cent of respondents, government assistance packages implemented during the first year of the pandemic and wound back throughout 2021 — such as JobKeeper and JobSeeker — are required over the next 12 months for 28 per cent of respondents.
Further financial burdens, including rising cost-of-living pressures — for example, rent, fuel, and groceries — remained a pain point for over one-third of respondents, highlighting the continued financial burden of the COVID-19 pandemic.
Almost all respondents had a formal lease arrangement, with the majority of these considering their property to be affordable. However, AHURI explained that a large portion of these respondents held this belief due to the fact they either took on extra work, lived with family members, or went without essentials like medical and dental care.
More than half of surveyed Australians believed rent had become less affordable throughout the pandemic due to rent increases and broader cost-of-living pressures.
Additionally, one-third said the worry of eviction loomed over them throughout the pandemic, with half of these parties concerned that the owner of their property would sell due to their own financial pressures.
Confidence in their ability to secure a suitable and affordable rental property in the event of eviction was low amongst respondents, with a majority expressing a lack of faith in this occurring with an increase in prices reducing the ease of which this process can be undertaken, whilst others acknowledged high demand and competition for places was also a factor.
A snapshot of the Australian financial landscape in April 2021 from the BCEC Housing Affordability Survey had several key findings:
- Thirty-seven per cent of renters stated they were frequently unable to meet housing costs.
- Forty-three per cent estimated they spent more than 30 per cent of their income on rent.
- A 10 per cent rent increase would have severe impacts on 42 per cent of respondents, which AHURI labelled as “concerning” given the trajectory of Australian rents in the last 12 months.
The institute outlined that to close the continued financial scars left on renters by the pandemic, policy action and innovation focused on the rental market are necessary. It suggested key initiatives “could and should include reform of tenancy legislation, the provision of larger stock of affordable housing available through the social housing sector, and measures to sustain affordable entry into homeownership”.
