Emily Shoobridge has just rented a studio apartment after six months of couch-surfing.Credit:Joe Armao
“My mental health plummeted when I moved in there and I vowed never again to move into another.”
Shoobridge had spent half a year sleeping on friends’ floors and futons,and decided she would be better off living on her own rather than joining another share house.
“I knew going into it that it was going to be bloody tough,” she said.
“A lot of people have to settle for living situations they don’t necessarily want and that takes a toll.”
A studio apartment wasn’t Shoobridge’s first choice of property.Credit:Joe Armao
Grattan Institute economic policy program director Brendan Coates said Shoobridge was emblematic of a nationwide shift in housing demand. The pandemic caused Australians to value having their own,larger space,he said.
This new trend meant more homes were occupied,and when international borders reopened the market became much tighter than before the pandemic.
“It’s likely to get worse from here,” he said.
“A tight rental market means renters will be spending more of their incomes to keep a roof over their heads,which means they can’t spend as much money on essentials.
“We see rising rates of homelessness with rising rents. That’s the consequence.”
Coates said the crisis would deepen until a significant number of homes were built or made available for rent.
“Life’s tough if you’re a renter right now. You’ve got a big increase in demand with migration going up against a static supply,so in the short term rents will keep going up,” he said.
He said housing stress was also associated with poor health outcomes and developmental issues with children.
“There is evidence that if you’re living in housing stress it has a long-term impact on your wellbeing,” he said. “If you’re in financial stress it has an effect on your health.
“It has an impact on the long-term development of kids. There’s stress in the household,they miss out on nutrition if they don’t have enough to eat and they can miss out on educational opportunities.”
Centre for Independent Studies chief economist Dr Peter Tulip agreed rising rents would make homelessness worse.
“It’s a very tight rental market and landlords are able to charge substantially higher rents and still fill their properties,so why wouldn’t they?” he said.
Tenants looking for a home face tough competition.
“The single biggest cause of homelessness is high rents … We are seeing growing homelessness. It’s obviously not by choice,people are being squeezed and left without an affordable alternative and the result is homelessness.”
He said immigration has gone from close to zero to quite high levels,reversing the trend earlier in the pandemic.
“[Rents] will keep rising steadily until we start building more housing. The cost of housing will keep getting more and more expensive until policy changes.”
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Tulip echoed the Grattan Institute’s concerns about the effect of high rents.
“One of the big effects on society is that higher housing costs are making Australia more unequal,” he said.
“High housing costs hurts lower income earners because they tend to be renters while benefiting the wealthy because they own the housing. This is a major factor of driving inequality in Australia.“