Amelie Hansen continues to study law and business while working two full days a week as a disability support worker in her mother’s Collaroy home, which is just a short stroll from the beach. She makes $540 every two weeks, which is respectable by most standards, but she doesn’t really get to choose whether or not to move out. A rental market that has subtly surpassed what a part-time wage can cover has already created it for her.
“I don’t have a single friend who is renting,” she states. Parents provide funding for those who are enrolled in college. Like her, everyone else simply remains where they are.
The story is not out of the ordinary. It’s turning into the standard. According to recent research from Insights Exchange, 31% of Australians between the ages of 18 and 29 still live with their parents or in-laws, while 21% of those between the ages of 25 and 29 do the same. When compared to census data from 2007, when only 7.8% of that older age group had not moved out, the change appears to be more of a structural shift in the way young Australians live than a trend.
Beneath the headline figure, there is also a more subdued expense. Sixty-three percent of parents who have adult children still pay their bills and buy their groceries. According to Nichola Quail of Insights Exchange, parents are bearing the burden of their children staying at home because many of them should be concentrating on their own retirement.
The math is done for you in Hansen’s case. At Domain’s reported median weekly income of $1,100 for a three-bedroom apartment, her share would be $366, or 67% of her earnings. A comparable rental cost $146 per person per week five years ago, which, when compared to her inflation-adjusted earnings at the time, would have required her to pay about 33% of her income. No amount of policy language can adequately convey the significance of the five-year increase from 33 to 67 percent.
A lot of public commentary has blamed international students for this, which is tempting. However, that narrative is significantly complicated by a report from the Student Accommodation Council. Only 4% of Australia’s rental market is made up of international students. In fact, rents began to rise in 2020, a year when the majority of international students had returned home and very few were arriving. While student visa arrivals decreased by 13% between 2019 and 2023, median weekly rent increased by 30% during that time. The story is not supported by the timeline.
Smaller households, interstate relocation, growing construction costs, delays in planning, and even the trend of turning spare bedrooms into home offices are some of the factors that are actually causing it to appear messier and more difficult to resolve. These don’t all make for neat villains.
Regarding whether the recent tax changes will be beneficial or detrimental, there is also disagreement. According to Grattan Institute modeling, eliminating investor concessions could increase the national median rent by about $2 per week. That is overly optimistic, according to economists like Peter Downes and Ray White’s Nerida Conisbee, who cite Melbourne as an example, where rents have increased at a rate three times faster than home prices as investors have retreated. Although it’s still unclear which version is correct, Cotality’s 1.5% vacancy rate in May and 5.9% annual rent growth indicate that the pressure isn’t going away anytime soon.
According to Maiy Azize of Everybody’s Home, the true solution is structural: rent caps, similar to what the ACT has attempted, and a fundamental realization that renting is no longer a temporary phase leading up to homeownership. In Australia, the average age of a first-time home buyer is currently 34. The percentage of people who own a home has decreased from 71% in 1966 to 67% in 2021.
A room in a shared house close to a train line would satisfy Hansen. It’s a modest request. Even that seems unattainable at the moment.
