More people than ever turning to rentals due to rising property prices and limited housing stock, with 71% of Australians who rent do so because they simply cannot afford to buy a home – a figure significantly higher than the global average of 55%.
According to new research from Capterra, the escalating costs and competitive nature of the rental market have left many Australians struggling to secure affordable housing options.
Further, the housing crisis has deepened since the COVID-19 pandemic, with rental prices in Australia’s capital cities rising dramatically. Analysis conducted by Everybody’s Home shows that renters in capital cities are now paying an average of $14,700 more per year to rent a house and $9,600 more per year to rent a unit compared to pre-pandemic rates in 2020.
Impact of short-term rentals
The growing popularity of short-term rental platforms, such as Airbnb, has played a significant role in driving up rental prices. These platforms were initially part of the sharing economy, allowing homeowners to monetise underutilised spaces. However, the expansion of short-term rentals has had a negative impact on long-term rental markets, especially in Australia, where tenants face some of the world’s highest rental prices.
According to Capterra’s Tenant Experience Survey, 57% of respondents cited increased rental prices as the top challenge arising from the proliferation of short-term rentals. The data also revealed that 85% of participants believe that restricting short-term rentals is necessary to stabilise the housing market.
“The growth of short-term rental platforms has certainly benefited local economies, but it has disrupted local housing markets, especially in Australia,” said Andrew Blair, an analyst at Capterra.
The increased competition for rental properties, combined with the limited availability of long-term rentals, has exacerbated the imbalance between supply and demand.
Capterra’s survey found that 37% of respondents identified competition from other tenants as a major issue, while 27% pointed to a limited pool of available long-term rentals.
Severe Housing Stress and Poverty
Everybody’s Home, a national campaign advocating for more affordable housing, has emphasised the growing stress on renters due to the steep rise in rental prices. Speaking during Anti-Poverty Week, Everybody’s Home spokesperson Maiy Azize highlighted the severe consequences of the housing affordability crisis on the daily lives of Australians.
“The biggest cost-of-living expense for most people living in Australia is keeping a roof over their head,” she said.
“People are sacrificing the necessities to afford the rent, living in appalling unhealthy conditions because there’s nowhere else for them to go, and ditching important life decisions because of housing insecurity.”
Ms Azize also pointed to the broader impact on cities, stating, “Australians are being priced out of the cities where they work,” which can affect the liveability of our cities and the quality of essential services.
“This Anti-Poverty Week, we’re calling on all Australians to back our call for more social housing to fix Australia’s housing crisis. We need to end the shortfall and turn social housing into an option for more Australians, not just a safety net for those at the margins.”
