At 51, Mandy Pritchard does not want to live in a share house, but the unfolding rental crisis means the full-time worker may have to.
It’s a situation the Reserve Bank governor, Philip Lowe, suggested more people would need to consider to bring rents down – telling Australians on Wednesday “we need more people on average to live in each dwelling”.
After splitting with her partner of 19 years, Pritchard – an NGO worker – wants to move from Melbourne to be closer to friends in Sydney or Wollongong, and is being forced to apply for share houses.
“It’s challenging because I’m obviously not the first choice for a household of twenty-to-thirtysomethings ” Pritchard said. “I didn’t think I’d be going back to share accommodation at this age, but that’s the reality because of the cost of rent.”
Pritchard estimates it would cost 50% of her wage to rent a one-bedroom home in Sydney’s Newtown, where her friends are, if she were to live alone.
“It’s not as if I am on low income, I make a decent wage,” she said. “I wanted to live even in just a studio apartment, but it just isn’t feasible.”
Speaking in Senate estimates on Wednesday, Lowe warned not enough dwellings were being built to keep up with demand.
“Higher prices do lead people to economise on housing. Kids don’t move out of home because the rents are too expensive or you decide to get a flatmate,” he said. “That’s the price mechanism at work.”
Lowe said an increase in migrant workers and international students meant the population would rise another 2% – and the only way to ease the pressure in the longer term was more supply.
“Are there 2% more houses? No,” said Lowe. “We’ve got a lot of people coming into the country, people wanting to live alone or move out of home. The way that this ends up fixing itself is, unfortunately, through higher housing prices and higher rents.”
The national rental vacancy rate was sitting at 1.2% in April, according to research by SQM.
Lowe’s comments were criticised by housing advocates who argue governments need to build more dwellings. Data shows Australians are once again starting to share more.
Claudia Conley, community manager at Flatmates.com.au, said the share housing site had just experienced its busiest April ever with record new and active members.
“This year has been unusually busy and we started to see a real increase in traffic around October, which has not died down,” she said.
“Month after month we’re breaking new records, with April just gone our busiest ever. March recorded the highest number of new property listings in over two years, since January 2021, up 14% month-on-month to be 33% above March 2022 levels.”
CoreLogic Australia’s head of research, Eliza Owen, said the makeup of dwellings had “a significant” impact on the rental market – with people moving during the pandemic creating the need for an extra 120,000 homes.
Owen said recent data showed there was a “slight” move towards share housing but it was nowhere near pre-Covid levels.
“We’ve gone through the pandemic, a lot of incomes have also gone up and that’s allowed a lot of people to actually hold on to their larger rental properties,” she said. “But we’d expect more share houses to now reform to try and deal with the increases in rental costs.”
The share of one-person households in the pandemic peaked at 26.6% but was now trending back to 26%, she said. That is still substantially higher than 24% pre-pandemic, but the decrease could be due to affordability issues.
Ben Harris has lived on Victoria’s Mornington Peninsula for three years. A full-time carer for his mother, their rent recently increased by $120 a week to $520 for their three-bedroom unit in Capel Sound, making it unaffordable.
Finding a new home has become so hard that they are looking to start a share house in a cheaper area.
Harris has been searching for eight weeks and has been knocked back four times despite having a strong rental history.
“It’s been so frustrating looking, as any available places are being taken by … people moving down from Melbourne who can offer to pay six months’ rent in advance, for example,” he said.
Everybody’s Home spokesperson Maiy Azize said share housing was not the solution – building more social and affordable homes was.
“Younger Australians are already living at home for longer than any previous generation,” she said.
“Working people are share housing until their 30s and 40s and many people on low incomes are stuck in overcrowded homes.
“The reality is that record numbers of homes have been built over the past 10 years. Our system allows some people to hoard those homes, keep houses empty and profit from record-high rents.”
The federal treasurer, Jim Chalmers, defended Lowe on Wednesday night, saying the RBA governor was making the case for increased housing supply.
