Older Australians who fall out of home ownership Older Australians who fall out of home ownership
Finance Property Growing numbers of older Australians forced to rent in retirement Updated:

Growing numbers of older Australians forced to rent in retirement

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Older Australians are falling out of home ownership and resorting to renting in their retirement years, a new study shows.

Six out of 10 renters, including a growing number of older Australians, do so because they have no other choice, according to a survey of more than 3000 renters by the Bankwest Curtin Economics Centre.

“Once dominated by young people who were saving to buy their own home, [the rental market] now houses a larger number of families and a growing cohort of older people,” the report said.

Nearly a third of Australians rent, with the number predicted to rise as buying a home becomes increasingly costly and out-of-reach for those on low and medium incomes.

More than a quarter of renters aged 65 and over have been in the private rental market for less than five years – a statistic described as “very important in policy terms”.

“Many will have been forced out of ownership and, if older Australians are falling out of home ownership, it is likely to be a struggle to maintain rental costs into retirement,” the report said.

Renting in Australia is expensive, with older Australians often the worst hit. Nearly half of all renters spend more than 30 per cent of their gross income on rent; for renters 55 and over, that figure rises to 63 per cent.

“As households get older, they are more likely to be forced into spending a high proportion of their income in rent,” the report said.

Affordable rental options have not kept pace with growing demand, the report found, with “a decline in the proportion of public housing” exacerbating the issue.

However, while those on lower incomes struggle to find adequate housing in the cut-throat rental market, growing numbers of higher income Australians are deciding to rent largely due to the flexibility it provides, the study found.

Results showed that the majority of rental households – 60 per cent – had incomes below $78,000.

The poll also returned some surprisingly positive results, in contrast with other recent studies that have painted a “bleak picture of the reality of renting in Australia”.

older people renting
The number of people over 65 who rent their home is growing. Photo: Getty

Renters professed “quite a high level of satisfaction” with their situation, the study found.

About 69 per cent of respondents rated the quality of their rental home as good or excellent, with 25 per cent stating it was average. Just 6 per cent complained their rental home was in poor or terrible condition.

“Most past research has focused on the problematic lower end of the private rental system, and we’re not saying it’s rosy down there,” study co-author Steven Rowley said.

“There are still major problems at the bottom end, but a lot of people are satisfied [with their rental experience]”.

While “aspiration for home ownership” still exists, growing numbers of Australians were looking at the “trade off” between the cost of buying and renting, and choosing the latter, Dr Rowley said.

“Young people still want to get into home ownership, but realise that they’ll struggle, and that private rental will be a long-term tenure,” he said.

Tenants Union of NSW spokesman Leo Patterson-Ross expressed scepticism about some of the report’s findings.

“It doesn’t help to look at the people doing really well and say everything’s fine,” he said.

“That’s not how you measure housing crises, or health crises, it’s not a useful thing.”

What isn’t in dispute, however, is that “the experience of people with vulnerable incomes, and low-incomes, is not satisfactory”, Mr Patterson-Ross said.

Tenants Victoria spokeswoman Devon LaSalle said while positive rental experiences were not unheard of, the organisation’s helpline was inundated by renters having issues with their accommodation.

“Our helpline continually struggles to cope with the amount of queries we receive from tenants,” she said.

Common issues faced by renters range from unfair evictions and retaliation from landlords to discrimination and poor living standards.

“These issues are particularly prevalent for renters on low incomes, those from indigenous or migrant backgrounds, people living with a disability or mental illness, and elderly renters,” Ms LaSalle said.

“With more people renting than ever before in Australia’s history and doing so longer into their lives, it is important to make sure that tenancy laws across the country set renters up for the best possible quality of life.”

In September, Victoria’s Parliament passed groundbreaking rental laws making the state the first in Australia to provide renters with basic rights and protections.

The changes include requiring all rental properties to have such basics as deadlocks and smoke alarms. Renters also have the right make minor modifications (such as nailing a hook into a wall) and more rights around pets.

Following the passage of the Victorian laws, NSW proposed similar amendments.

This was followed by the release of an open letter signed by scores of housing researchers from universities across Australia.

Renters live in “legal insecurity” according to the letter. It called for the state government to go further in reforming NSW’s “deficient” and  “increasingly out of step” tenancy laws.

Changes must include an an end to “no-grounds evictions”, which allow landlords evict tenants during a lease without a reason, the 45 signatories said.

“Everyone should have a secure, affordable home of decent standard, whether they own or rent,” the letter said.

“Too often, however, our rental housing sector fails to deliver on this principle.”