The Times Australia
The Times World News

.
The Times Real Estate

.

Renters spend 10 times as much on housing as petrol. Where's their cost-of-living relief?

  • Written by Joey Moloney, Senior Associate, Grattan Institute
Renters spend 10 times as much on housing as petrol. Where's their cost-of-living relief?

If the pre-election budget was designed to address the cost of living, it missed something. In an effort to help those whose wages aren’t growing as quickly as prices, it offered

But it failed to offer help to some of the Australians who need it the most.

Australians only spend 3 per cent of their incomes[1] on petrol. The typical renter spends more than 10 times[2] as much on rent.

After a minor and temporary reprieve early in the pandemic, advertised rents are again on the rise – up nearly 10%[3] over the last 12 months.

Weekly rents, national

SQM Research[4] Low-income renters are especially hard hit. More than half suffer rental stress[5], meaning they spend more than 30% of their income on rent. One-third have less than $500 of savings on hand[6] in the event of an emergency. Prime Minister Scott Morrison has responded to complaints about rent by saying the “best way to support people renting a house is to help them buy a house[7]”. Cutting deposits can’t cut it Morrison points to the federal government’s decision to more than double the size of the Home Guarantee Scheme[8], which helps people buy a home with less than the standard 20% deposit. From this year, up to 50,000 people will be able to access the scheme, under which the government offers a guarantee to the banks that cuts the up-front deposit to 5% for ordinary first home buyers and just 2% for 5,000 single parents. There are 10,000 places reserved for regional house buyers. Read more: The compelling case for a future fund for social housing[9] The expanded scheme will help some Australians buy their first home earlier, but for everyone else looking to buy a house, the extra demand created by the scheme risks pushing up prices even higher. And many renters won’t be able to find even the 5% deposit. Five per cent of $600,000 is $30,000. Rent assistance assists less If we really wanted to help low-income renters, we would boost rent assistance. Commonwealth Rent Assistance[10] is paid to pensioners, other beneficiaries and those receiving more than the base rate of Family Tax Benefit Part A who rent in the private rental market or community housing. Paid at the rate of 75 cents for every dollar of rent above a threshold until a maximum, it works out at up to for $72.90[11] a week for a single and $68.70 for each member of a couple. Read more: $1 billion per year (or less) could halve rental housing stress[12] It hasn’t kept pace with rent. Boosting it by 40%, (roughly $1,450 a year for a single), would restore it to where it was in relation to rent, albeit at a substantial cost – $2 billion per year[13]. If the new rate was linked to the rents low-income earners actually pay, rather than to overall inflation as it has been, renters would be protected in the future. Some argue this would lead to higher rents. But that’s unlikely[14]. Most low-income renters first pay what’s needed to put a roof over their heads, then use what they have left to cover food and other bills, rather than offering more rent. Rents needs properties The other thing governments can do is to increase the number of homes. Australian cities are not delivering denser forms of housing – townhouses and apartments[15] – in the quantities Australians say they want. The people who already live in a given suburb usually want it to stay as it is, whereas the people who would like to live there don’t get a say because they can’t vote in council elections. Their interests are left unrepresented, meaning housing isn’t built where it is needed. Read more: Older women often rent in poverty – shared home equity could help[16] The Commonwealth can help drive change by offering the states incentives[17] tied to how well housing supply keeps up with population growth. This will only reduce rents slowly, but low-income renters stand to gain the most since they are the first to lose out in the scramble today, just as they seem to have lost out in the pre-election budget. References^ 3 per cent of their incomes (www.abs.gov.au)^ 10 times (www.abs.gov.au)^ up nearly 10% (sqmresearch.com.au)^ SQM Research (theconversation.com)^ rental stress (grattan.edu.au)^ less than $500 of savings on hand (www.theguardian.com)^ best way to support people renting a house is to help them buy a house (www.theguardian.com)^ Home Guarantee Scheme (ministers.treasury.gov.au)^ The compelling case for a future fund for social housing (theconversation.com)^ Commonwealth Rent Assistance (www.dss.gov.au)^ $72.90 (www.servicesaustralia.gov.au)^ $1 billion per year (or less) could halve rental housing stress (theconversation.com)^ $2 billion per year (www.dss.gov.au)^ that’s unlikely (www.ahuri.edu.au)^ townhouses and apartments (www.afr.com)^ Older women often rent in poverty – shared home equity could help (theconversation.com)^ incentives (grattan.edu.au)

Read more https://theconversation.com/renters-spend-10-times-as-much-on-housing-as-petrol-wheres-their-cost-of-living-relief-180702

The Times Features

The Best Adjustable Bed and Mattress Packages for Comfort

The appropriate bed and mattress are essential for establishing the perfect sleep environment. If you seek a way to upgrade your sleep experience, adjustable bed and mattress pac...

Designing a Modern Home: Features That Will Make Your Dream House Stand Out

Designing your dream home is an exciting journey, and for many, it’s an opportunity to create a space that reflects their personal style, functionality needs, and modern trends. ...

Client Dinners Done Right: Tips for Meaningful Engagement

Client dinners offer more than just a meal—they’re an opportunity to build lasting business relationships in a more personal and relaxed setting. Done well, these dinners can str...

From Classic to Contemporary: 5 Timeless Costumes for Any Party

When it comes to dressing up for a costume party, you want to choose something that is not only fun but also memorable. Whether you're attending a Halloween event, a themed gathe...

Action Figures as Art: The Growing Trend of Custom Figures and Modding

Action figures have long been regarded as collectible items, valued by enthusiasts and fans for their connection to popular culture. However, in recent years, a growing trend has...

The Ultimate Guide to Securing Grants for Your Small Business in Australia

Running a small business in Australia comes with both opportunities and challenges. While it can be rewarding, funding your business through the early stages or periods of growth...

Times Magazine

Top Benefits of Hiring Commercial Electricians for Your Business

When it comes to business success, there are no two ways about it: qualified professionals are critical. While many specialists are needed, commercial electricians are among the most important to have on hand. They are directly involved in upholdin...

The Essential Guide to Transforming Office Spaces for Maximum Efficiency

Why Office Fitouts MatterA well-designed office can make all the difference in productivity, employee satisfaction, and client impressions. Businesses of all sizes are investing in updated office spaces to create environments that foster collaborat...

The A/B Testing Revolution: How AI Optimized Landing Pages Without Human Input

A/B testing was always integral to the web-based marketing world. Was there a button that converted better? Marketing could pit one against the other and see which option worked better. This was always through human observation, and over time, as d...

Using Countdown Timers in Email: Do They Really Increase Conversions?

In a world that's always on, where marketers are attempting to entice a subscriber and get them to convert on the same screen with one email, the power of urgency is sometimes the essential element needed. One of the most popular ways to create urg...

Types of Software Consultants

In today's technology-driven world, businesses often seek the expertise of software consultants to navigate complex software needs. There are several types of software consultants, including solution architects, project managers, and user experienc...

CWU Assistive Tech Hub is Changing Lives: Win a Free Rollator Walker This Easter!

🌟 Mobility. Independence. Community. All in One. This Easter, the CWU Assistive Tech Hub is pleased to support the Banyule community by giving away a rollator walker. The giveaway will take place during the Macleod Village Easter Egg Hunt & Ma...

LayBy Shopping