Business owner Jack Evans and his partner are relying on family to get a good deal in the home rental market.
"We're renting a property owned by a family member, so we've actually negotiated a price for rent that is probably below what the current inflated market value is," he said.
Mr Evans lives in Orange in regional NSW where rents rose by 20 per cent in the first 15 months of the pandemic.
He said he was stuck in the rental market because he still could not afford to buy a house, something he has been trying to do since moving back to his home town four years ago.
It is a common story across regional Australia, according to a new report released today by the University of NSW (UNSW) and the Australian Council of Social Service (ACOSS).
The study, which examined trends in Australia and eight other countries, found low interest rates, government income support, people's "pent-up savings" and their desire for houses instead of units, drove the surge in prices.
It showed rental prices in regional areas had risen by 18 per cent in the two years to late 2021, whereas in metropolitan areas rents had only just recovered to pre-pandemic levels.
Housing pressure
Professor Pawson said in Orange and other areas, at the same time as people flocked from Sydney under working from home arrangements, "fewer properties [were] being made available on the market" and that put significant pressure on rentals.
The report showed house prices have increased by 19 per cent in Australia, compared with 22 per cent in New Zealand, 17 per cent in Canada, and 12 per cent in the UK.
Professor Pawson said, while popular economic stimuli during the pandemic helped avert a predicted 30 per cent slump in house prices, they came at a price.
"One of the effects of the monetary stimulus, trying to keep the economy going, is it's had this sort of negative side-effect of pumping up the housing market in a way that has been quite damaging," he said.
"By making cash grants available on a bigger scale than usual, I think with hindsight it is something that they probably should be regretting now because that only compounded the spike in house prices that we've seen over the past year or just over a year."
Welfare reform 'overdue'
While much of the stimuli introduced during the pandemic had fallen by the wayside, Professor Pawson said the impacts of some made a case for long-term change.
The report noted that the lifting of other government interventions to protect tenants, such as moratoriums on evictions and price increases, had exacerbated the rental crisis.
He said the doubling of job seeker payments for a period of time was "a very insightful response" and that it was a "missed opportunity" when it reverted to "one of the lowest rates of social security payments among OECD countries".
"That's an overdue reform, which I think a lot of economists would agree is something that Australia should be contemplating anyway," Professor Pawson said.
