Australian students struggling to rent a home, let alone buy one

Australian students struggling to rent a home, let alone buy one:

Australian students struggling to rent a home, let alone buy one


By Millie Muroi
May 22, 2022 — 6.00am

Students are facing a triple threat of a post-recession economy, stagflation and rising interest rates – making moving out of home unaffordable and home ownership an unlikely prospect.

Experts also warn that the trend of young people staying at home is putting more pressure on the housing market because parents cannot downsize.


Sissy Qin says she wants to move out but that living costs such as rent are too high.CREDIT:NICK MOIR

University of Sydney student Sissy Qin wants to move out of home but said the cost of living is too high for it to be realistic. “I definitely want to move out,” she said. “I think the only reason I haven’t yet is because of financial reasons. Rent is really, really high.”

Instead, she is fortunate enough to live rent-free with her parents, paying only for her groceries and working part-time to cover the costs of personal expenses.

It’s part of a broader trend noticed by McCrindle Research’s principal Mark McCrindle.

“There’s data from the Australian Bureau of Statistics showing that household size has gone up,” he said. “It’s not because birth rates have changed. More kids are staying home or returning to their parental home.”

He also said a significant proportion of parents in his own research indicated that their children were delaying moving out.

UNSW student Sirisha Kajur has no choice as her parents are moving overseas this year.

Kajur is no stranger to spreadsheets – she works part-time as an accountant – but feels “nauseous” when she sees the stratospheric costs of moving out.

“As someone moving out for the first time, it feels very discouraging to make the move of going independent when you see those prices,” she said.

Despite working part-time, Kajur can only afford her rental costs. “All the other living costs, like food, I need help from my parents,” she said. “About 70 per cent [of my living costs] come from my parents.”


Sissy Qin says she wants to move out but that costs like rent are too high.CREDIT:NICK MOIR

She has found a potential flatmate to reduce costs but said places within a five-kilometre radius of her university were expensive – between $600 and $900 a week. 700x50=35,000

Average unit rent prices in NSW increased by about 28 per cent from the first quarter last year, to the same period this year.

The increasing cost of renting means more young people are choosing to share accommodation, but those arrangements are less secure, according to McCrindle.

“It’s unstable because you don’t end up with long-term leases,” he said. “One person in a group of four moves out and then the rental of that home is not sustainable.”

McCrindle said insecure housing impacts young people’s job security, social engagement and sense of belonging. “If we’re constantly being moved from one place to the other, it’s hard to be consistent in the study or the job or, for that matter, the social network that we really need to thrive,” he said.

And while student accommodation is an option, Kajur said it’s unlikely she’ll be able to find a place in time. “Everything on campus is on a waitlist so it’s a complete gamble.”

International student Melisa Phanna said that, even with parental support, it was stressful trying to find an apartment when she moved to Sydney in January.

“It was incredibly difficult because there were so many processes and [landlords] were looking for someone with a job,” she said. “You can’t just say you’re going to rely on your parents to pay for it. That’s what a lot of real estate agents pointed out to me.”

And because she was looking for an area in which she could feel safe, Phanna said it was even more difficult. “It was really hard to find the balance of a place in a safe location at a decent price.”

Phanna initially sought flatmates to reduce her costs, but said it was too difficult and that she settled on a six-month lease in a small but expensive apartment to rent. “It’s tiny; it’s like a mini hallway ... I’m scared they won’t continue my lease [at the current rent].”

With inflation rising, Phanna is also feeling the pressure on other costs of living. “Grocery prices here have increased a lot ... They’re so expensive to the point where you’re better off just eating cheap takeaway which sucks.”

Young people are particularly vulnerable to economic shocks because they generally don’t have much savings, McCrindle said.

“Interest rates changing and a bit of a rise in cost of petrol or housing isn’t affecting a 40- or 50-something-year-old.”

Qin said she would like to own a home one day, but it looks impossible without help from her parents or a colossal loan.

“I’ll probably never be able to afford a house unless I take out a home loan and pass it off to my kids,” she said. “It’s definitely a huge worry.”

McCrindle said the trend of students staying at home has a negative knock-on effects for housing affordability and supply. “[Before], parents would downsize into a unit,” he said. “But because their kids might still be there or might be back, they’re not downsizing as much.”

That limits the supply of houses, with buyers having to bid for a smaller pool of appropriately sized properties, driving up house prices. While the reduction in the proportion of parents downsizing leaves more apartments free, McCrindle said “young people today can’t afford to move out” — at least, without parental support.