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Australia’s Housing Crisis Report

How housing stress and low supply of affordable housing is causing a widespread economic and social crisis in Australia
Published on January 31st, 2024
  Written by 
Adrian Edlington
Adrian Edlington is PR & Communications Manager at Savvy. With a keen interest in personal finance, car loans, the mortgage industry, cost of living pressures, electric vehicles and renewable technology, Adrian's research includes conducting primary data surveys and analysis of up-to-the-minute secondary Australian data sources. His work on behalf of Savvy has been featured on ABC.net.au The Conversation, the Sydney Morning Herald, AFR, News.com.au, The Age, Herald Sun, Adelaide Now, SBS On The Money, 7News, Car Expert, Which Car, Drive.com.au and more. In his spare time, Adrian enjoys mountain biking and business podcasts.
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Bill Tsouvalas

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Bill Tsouvalas
Bill Tsouvalas is the managing director and a key company spokesperson at Savvy. As a personal finance expert, he often shares his insights on a range of topics, being featured on leading news outlets including News Corp publications such as the Daily Telegraph and Herald Sun, Fairfax Media publications such as the Australian Financial Review, the Seven Network and more. Bill has over 15 years of experience working in the finance industry and founded Savvy in 2010 with a vision to provide affordable and accessible finance options to all Australians. He has built Savvy from a small asset finance brokerage into a financial comparison website which now attracts close to 2 million Aussies per year and was included in the BRW’s Fast 100 in 2015 as one of the fastest-growing companies in the country. He’s passionate about helping Australians make financially savvy decisions and reviews content across the brand to ensure its accuracy. You can follow Bill on LinkedIn.
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   Commentary by 
David Webb

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David Webb
With 14 years’ experience across sales, property management, as a business owner and as an agency supplier, Homely's Head of Industry and Revenue, David Webb, brings a breadth of valuable industry knowledge to his work at Homely, while seeking to anticipate the demands of an ever-changing industry.
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Savvy delves into the July 2023 housing crisis survey data to learn what impact this is having on vulnerable Australians.

  • Survey by Everybody’s Home shows two-thirds of Australians are experiencing housing stress
  • Rents for a 2br unit have risen 44.1% since March 2020 (national average), with wages rising only 2.5%  
    98% say that they are concerned about the housing crisis
  • 95% of organisations say their workload has increased since the beginning of the housing crisis 

Despite high inflation and rising interest rates to combat them, housing prices haven’t eased in kind. High demand and low supply have spurred on a housing crisis, where affordable housing is growing further and further out of reach.  

According to a survey-based report by Everybody’s Home, a coalition of housing, homelessness, and welfare organisations to adequately address the housing crisis Australians face at current, rates of housing stress are climbing, there is major concerns about the ongoing crisis, and charity and financial aid services are struggling to meet the demand of those in crisis. 

What is the current experience of Australians living with mortgage or housing stress? What support are they receiving? Is it enough? How are organisations and government working to reduce this stress, and what is their experience? 

Here are the results from the survey as well as research from other contemporary sources.  

Reasons for concern about the housing
crisis among community survey respondents

Total
Total Participants (%)
Uncertainty about the future81%
Worry about financial security75%
Worry about mental health and wellbeing66%
Lack of access to suitable housing 65%
Worry about physical health and wellbeing 52%
Worry about the safety of your family or loved ones37%
Worry about personal safety36%
Loss of independence35%
Disruption to employment 27%
Loss of livelihood26%
Lack of access to community facilities and services 25%
Separation from loved ones23%
Disruption to study or training14%

(Respondents choose all that apply)

Source: Brutal Reality – The Human Cost of Australia's Housing Crisis, (pg. 10)

Spending more than 30% of income on housing

# Participants% Participants
Total749100%
Yes50367%
No24633%

Source: Brutal Reality – The Human Cost of Australia's Housing Crisis, (pg. 9)

Spending more than 30% of income on housing

(of respondents renting and in share houses)

# Participants% Participants
Total361100%
Yes29582%
No6618%

Source: Brutal Reality – The Human Cost of Australia's Housing Crisis, (pg. 9) 

Defining housing stress 

Housing stress, rental stress, or mortgage stress all refer to a family, couple, or individual struggling to pay for their housing on an ongoing basis. By “paying for housing,” this not only means their individual rents or mortgage repayments, but rates (if applicable), taxes, house and contents insurance, repairs, maintenance, and other levies, such as those on strata-titled dwellings. 

The Australian Housing and Urban Research Institute and the report uses the 30:40 method of indicating housing affordability stress. This means the bottom 40% in the income distribution of Australia are paying more than 30% of their income in housing costs. This assumes those in higher income percentiles who use more than 30% of their income to pay for housing make a conscious choice, as it has less impact on that household’s ability to buy other essential goods and services. 

How many Australians are in housing stress? 

According to the survey (n=749), 67% or two-thirds of respondents said they were experiencing housing stress, i.e., spending more than 30% of their income on housing. More than four in five renters are in rental stress, at 82%. 

According to SQM Research, rents have risen from $365 per week (national average for a 2br unit) in March 2020 to $526 per week in January 2024 – an increase of 44.1% – while wages have only seen a 2.5% increase (averaged out per quarter) over the same period.  

Due to rents increasing at such a rapid pace, 18% of respondents to the survey said they were receiving Commonwealth Rent Assistance; 18% said they were receiving an alternate income support payment; 12% said they were waiting for community housing to become available; and 7% said they are already living in public housing. 

81% of those on income support said they were paying more than 30% of their income on housing. 

Homely spokesperson - David Webb offers his thoughts;

"Financial pressures are being felt across the board, and this is making people rush into decisions, which can make existing issues worse.

The main problem stems from the supply chain, which is struggling due to high building and upkeep costs. More people want homes than there are homes available. Builders have to warn customers that prices could jump by up to 30% from a year ago.

Meanwhile, property owners are selling their rental properties because they don't see them as good investments anymore, especially with high interest rates and expected government rules. This reduces the number of rental homes available even more, making the housing situation even tougher."

Australia’s greatest concern 

Since rates of housing stress are so high, almost all – 98% – said that they are concerned about the ongoing housing crisis in Australia.  

Their top five reasons being, Uncertainty about the future (81%), worries about financial security (75%), worry about their mental health (66%), lack of access to suitable housing (65%), and worry about physical health and wellbeing (52%). 

Organisations dealing with the housing crisis 

There are many non-government and government organisations trying to mitigate the housing crisis or deal with its effects, such as people finding themselves homeless. According to data from the Australian Institute of Health and Welfare, almost two-thirds (63%) of those requesting assistance were turned away due to a lack of available accommodation.  

As such, 95% of those in housing stress-related organisations have reported an increased workload since the beginning of the housing crisis.  

This has impacted the organisations in many ways. The top five impacts on organisations being an increased casework complexity (89%), not being able to provide long-term housing (79%), increased waiting times (73%), an inability to meet client needs (67%) and staff burnout or attrition (61%). 

These impacts have serious implications for clients in need of housing or housing stress relief. 67% of organisations say that it leads to homelessness. The flow-on effects also mean clients are unable to afford their rent or mortgage (57%), have ongoing mental health problems (41%), are unable to leave unsafe home environments such as experiencing domestic violence (33%), and ongoing financial stress (28%).  

This has also impacted the staff and volunteers in housing crisis relief, with 94% saying it has affected their mental and sometimes physical wellbeing. In fact, some staff also struggle with finding adequate housing for themselves, effectively competing against the clients they are there to help. 

What can be done? 

Without increased supply and other methods of bringing housing affordability into the view of the bottom 40% of Australians, there is no real end in sight for the housing crisis. We can only hope that the economy doesn’t experience any sharp shocks like it did during the post-COVID era and help drive up wages while supressing inflation. 

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