Catch-22 of Aussie property rentals right now

Renters, don’t worry! Your landlord may be increasing your rent to record highs, but good news: they’re also not investing in new properties because it’s too expensive, so you have nowhere cheaper to move to!

Rock, meet Hard Place. (Which you rent. Not own). 

So why are Australian renters facing a catch-22?

Inflation has bitten a chunk out of everyone, whether you rent or own your home. Rising interest rates have clamped down on home loan holders by hiking their mortgage repayments. Landlords have passed along these added costs to their tenants, which according to CoreLogic, drove a record-breaking 10% spike in rents through 2022. 

But while rate hikes may drag down inflation and property price growth, they also undercut the housing supply for renters because fewer people can afford to invest or build. (Construction costs have also skyrocketed because of inflation). 

Altogether, this creates a catch-22 for Australian renters, according to Master Builders of Australia chief executive, Denita Wawn. They can struggle to afford their current rent, or try their chances in an expensive rental market with record-low vacancy rates.

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Warn says we simply don’t have enough homes to meet current demand, and it’s hurting everyone.

“If we’re going to achieve economic growth in this country, we need to house people. Not only people in Australia now but those who we want to come to Australia to meet all of our current labour shortages. At the moment we can’t house them. We can’t even house the people that are here. So we’ve really got to resolve this housing crisis.”

According to the ABS, 31% of the Australian population rents their home .

While we can always hope and pray for rental reform (which is good for homeowners, too), practical problems deserve practical solutions. So if you’re struggling at the moment, here are some first steps you can take to save money on rent. 

• Improve your income by taking freelance gigs or negotiating for a pay rise.
  
• Let your landlord/agent know you’re experiencing financial hardship, or ask for a rent reduction. 
  
• Rethink your budget, perhaps with the help of a budgeting app.
  
• Cut back on spending. You can start with these 10 ways to handle the cost of living.  
  
• Reach out to your bank – it will usually have amazing savings tools to help you get back on your feet. 
  

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