Young renters left with $13 a day after rent rises eat into income, new analysis reveals

Young Australians are being pushed to the brink of homelessness as rents soar above their incomes, new analysis has revealed.

The study, by Homelessness Australia, found the average 16 or 17-year-old renter would now be paying about 73 per cent of their income on housing.

The advocacy body compared the average rent for half of a two-bedroom apartment over a two-year period against the government assistance provided to youths unable to live with family.

The research found between April 2021 and March 2023, the national average cost to rent a room had risen 24 per cent – while youth allowance and rent assistance had increased by 10 per cent.

Quarterly growth in capital city asking rents

Homelessness Australia chief executive Kate Colvin said the percentage of income young people paid in rent had jumped from 64 per cent to 73 per cent over the two years.

“After paying rent a young person on income support in Australia has only $13 a day to cover food, transport, medicine, power and other costs,” she said.

“Unless there’s some magic pudding we’re not aware of, this is a ridiculous expectation.

“The reality is landlords will not rent to a young person whose budget is stretched this thinly, making it almost impossible for young people who can’t live safely at home to find somewhere to live.”

The research found youths receiving income support payments, which is indexed twice annually against the Consumer Price Index, were left with about $17, or 18 per cent, less in spending money weekly.

Camera IconHomelessness Australia chief executive Kate Colvin called for a “urgent” increase for Youth Allowance and Commonwealth Rent Assistance. NCA NewsWire / Andrew Henshaw Credit: News Corp Australia

Rent cost against youth income

Ms Colvin said the research highlighted the need to lift assistance to avoid increasing youth homelessness.

“By failing to act, we are condemning growing numbers of young people to homelessness and poverty,” she said.

“If we want to give the next generation a genuine shot in life, the least we can do is give them the income they need to survive.

“It’s impossible to develop skills and experience or attain an education when you’re hungry or unsure of where you will sleep.”

Each year about 39,000 Australians aged 15 to 24 access homelessness services, according to the Australian Institute of Health and Welfare.

Ms Colvin said it was becoming harder and harder for services to find accommodation for young people and when they did, rents were “eye-wateringly expensive”.

Nationally, vacancy rates for homes stood at 1.1 per cent in March just slightly above the 16-year low of 0.9 per cent in July last year, according to figures by SQM Research.

Unit rents across the country rose 31 per cent over the past three years from $372 per week in March 2020 to $489 in March 2023.

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