Unpacking 25 years of tenancy data: ‘More rich are renting’

But even within that time frame, the concrete trend that AHURI has identified is clear: rentals are dwindling for those on low incomes.

The analysis looked at the availability of rentals to people in the lowest 20 per cent of incomes – what the research group defines as “very low income” earners – and found that 15 years ago, the country was looking at a shortage of 211,000 dwellings that were appropriately priced for that cohort. In 2021, that deficit had risen to 348,000 dwellings.

As a result, 82 per cent of households on very low incomes were deemed to be in housing affordability stress in 2021 – and that’s when pandemic conditions were such that rentals were in much greater supply, and prices in some markets had recently dropped.

Aligned with these findings, another trend emerged in AHURI’s research. When it comes to the rental market, things have changed for the higher earners in Australian society as well.

According to the latest census, nearly a quarter of renters come from top income levels – a vast increase since the 1996 census.

As one of the report’s authors, Margaret Reynolds of Swinburne University, explained:

“The 2021 census highlights the long-term change in the national distribution of renting household incomes. There has been a significant growth of renting households with high incomes of around $140,000 per year and above – these households accounted for only 8 per cent of private renters in 1996, ballooning to 24 per cent in 2021.”

Or as the report put simply, “more ‘rich’ are renting, while low income renters face greater stress”.

While there is now – and there was in 2021 – a shortage of supply for rentals priced to be appropriate for low income households, Ms Reynolds noted that the shifting demographics of the tenant pool has exacerbated issues for lower earners.

“Not all the lowest price rentals are available to be rented by households on the lowest incomes,” she explained.

“Many of these dwellings are occupied by households on higher incomes, making the shortage of lower priced homes even more acute,’ she added.

It’s a factor that the report urges policymakers to be aware of as they tackle the significant housing challenges of 2024.

“Unfortunately, the situation has not improved for lower-income renters since the census was taken. In 2022, rents began to increase substantially, leading to what many have termed a ‘rent crisis,’ as migration and mobility returned to pre-COVID levels placing additional demand pressure on the private rental market,” the report noted.

AHURI is asking governments to approach the country’s rental issues as seriously as they are taking threats to the nation’s environmental sustainability.

“Policy thinking to effect long-term change in the housing system is required, akin to responding to the challenges of climate change. To achieve long-term and transformative change, it is important to set clear goals for the private rental sector as part of the broader housing system for the longer term,” it concluded.

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