Melbourne’s median advertised rent has reached $600 a week, with a new survey revealing how even a $20 increase in housing costs could leave some Victorians struggling.
Victorians are cutting back on meals, healthcare and heating as new research warns many renters couldn’t absorb another $20 a week rise to their cost of housing.
The Everybody’s Home research found 43 per cent of Victorian respondents would have to cut back on essentials if their rent went up $20 a week.
The study found 27 per cent of respondents said if their rent increased, they would need to sacrifice essentials such as food and medication and pay bills late, while 16 per cent said they couldn’t afford the increase at all.
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Another 34 per cent would have to reduce non-essential spending.
The results arrive after REA Group’s September Rental Report revealed Melbourne’s median advertised rent reached a record $600 a week, up 5.3 per cent – or about $30 a week – in a year.
That is equivalent to a $1560 annual rise in the typical advertised rent.
The study found renters were already having to make sacrifices to keep up with their rent, with almost half of 317 respondents revealing they had cut back on heating and cooling, 41 per cent avoided medical or other essential appointments, 25 per cent skipped meals and 18 per cent skipped medication.
The national survey received 1150 responses between July and September, including 347 in Victoria, with 27 per cent reporting they spend more than half their income on housing.
Of the 285 Victorians who answered the $20 affordability question, 43 per cent said they would need to cut essentials or could not afford the increase at all.
But for one Victorian renter, even the survey’s $20 scenario sounded like a luxury.
The woman, a disability support pensioner whose name has been changed to Alice, said she was spending roughly three-quarters of her income on rent.
Alice said her rent had been set to rise by $50 a week, which she negotiated down to $40.
“I’m going into debt to stay housed,” she said.
A Victorian renter identified as Alice for her safety says she is borrowing money to remain housed, with rising rental costs leaving her fearful of homelessness. The woman pictured is not Alice. Picture: Getty Images
Alice said she was redrawing a personal loan, cutting back on groceries and seeking meal vouchers, while struggling to pay bills and build any savings.
“$20 a week sounds like a luxury,” she said.
Alice said she had been told her NDIS-funded mental health supports could be reduced at a future review, fearing she couldn’t afford to replace the lost assistance.
After more than a year on a social housing waiting list, Alice said she feared becoming homeless again.
Everybody’s Home spokeswoman Maiy Azize has called for limits on Victorian rent increases, arguing renters need immediate relief while more public and community housing is built.
Everybody’s Home spokeswoman Maiy Azize said households were making increasingly difficult trade-offs to stay housed, including moving further from work and squeezing into smaller rental homes.
“Once you’re already skipping meals, once you’re already moving further and further out, once you’re already cramming your family into a smaller rental, what’s left that you can cut?” Ms Azize said.
Ms Azize said placing limits on rent increases would provide immediate protection for struggling renters while building enough public and community housing would take much longer.
She pointed to the ACT, where most rent increases are restricted by a formula linked to local rental inflation, although exceptions apply.
Ray White Victoria and Tasmania chief auctioneer Luke Banitsiotis warned similar restrictions could encourage more landlords to sell, potentially reducing rental options.
Ray White Victoria and Tasmania chief auctioneer Luke Banitsiotis warned that tighter limits on rent increases could encourage more landlords to sell, potentially reducing rental choices.
Ray White’s Victorian auction data from August 1 to October 16 showed investors represented 27.5 per cent of sellers but just 17.5 per cent of buyers.
Mr Banitsiotis said some landlords preferred modest rent increases to retain reliable tenants, while others sought to recover rising ownership costs.
He said property managers advised on prevailing market rents, but landlords decided whether to increase them.
“If the government wants the private market to provide housing, well, it has to be an environment that the private market wants to operate in,” he said.
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