Yahoo Finance Rent or buy?: Young Aussies can’t ‘grow up’ with this ‘depressing’ problem
Abbey and Tahlia are trying to make it on their own but, despite having decent wages, they've struggled to find a place to live.
Young Aussies have surely heard the words 'grow up' when talking about the problems they're facing in the housing crisis. But those who want to live by themselves are finding it harder to do so while renting, and those wanting to buy and have independence? Forget about it.
Brisbane tenant Abbey O’Hagan has opened up about the lose-lose situation she’s currently facing after trying to find a new place to live alone as her rent is going up again, this time by $100 a week. The 24-year-old can either accept the higher rate or move out. But there’s nowhere “liveable” to go, she said, so sharing appears to be the only affordable option.
Tahlia Pritchard told Yahoo Finance she had to give up her dream of living alone after detailing her struggle to find a rental.
Have you been struggling to find a place to live? Email stew.perrie@yahooinc.com
“It’s quite a depressing thought that, as adults with decent jobs and steady income, people are being priced out of rentals. Isn’t living alone part of growing up?” Prichard said.
Even with a decent wage and a good rental history, she couldn’t get approved for a studio apartment, instead being forced to extend her current lease and get a new housemate.
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“I feel like a lot of millennials and Gen Z people have given up on the classic Aussie dream of owning a home but we’re now being priced out of the cities we want to live in or basically being forced into share-house life long term just to be able to make do when it comes to just paying rent, and that’s not even including bills, transport/car costs, and just generally living life.
“It just seems insane to me, that single people - even in their 30s and 40s - can’t have the option to live alone without putting themselves in severe financial stress.”
Single struggle hits hard for tenants
The brutal reality of renting is one many Australians know all too well, with 57 per cent of respondents to a Yahoo Finance survey saying rent was becoming too expensive.
People wanting to live by themselves have to spend more of their money on bills, compared to a couple or a share house, and run a higher risk of not being able to afford rent if they can’t work or they get sick. But even if you have enough money, it’s still a struggle to rent as a solo person.
“I checked the average salary for Brisbane and my salary is a little bit higher than that and even I can’t find somewhere that’s going to be even slightly liveable after paying tax and HECS,” O’Hagan said on TikTok.
“I basically have two weeks to figure out what I am doing.”
The 24-year-old, who is in a long-distance relationship, said she loved where she lived, and found the thought of leaving “really depressing”. The two things she mentioned wanting from a rental were a car space and the option to live alone.
Some suggested getting a housemate to bring down prices, but that's not always a straightforward option, or even what a tenant may want.
Aussies are paying as much as $600 per week to rent a room in a share house, as more people seek flatmates to help cover rising rent prices and the cost of living.
Nearly half (48 per cent) of renters have opted to live with others because they can’t afford to live on their own, according to Flatmates.com.au data.
Nearly a quarter (23 per cent) of the 10,300 people surveyed said they entered share-house living for the first time in 2023.
Renters pushed to buy, but don’t expect to live alone while saving
Leading property expert and Domain's chief of research, Dr Nicola Powell, told Yahoo Finance the rental market in 2024 would reach a “tipping point” where prices would drop because people simply could no longer afford them.
This would force some into share-house situations, which could mean renting a four-bedder with your mates, or losing some independence and moving back in with your parents. Powell said this could “fast-track” some into home ownership.
“A lot of renters have just gone, 'Well, we need to break into the housing market or we're never going to catch up’ and that’s the mentality many people now have,” Powell said.
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But there’s another double-edged sword for singles. Saving for a deposit on a single income while paying rent is rough. Plus, if you earn enough money, you’re likely pricing yourself out of home-buying schemes that could give you your first leg up.
Mortgage broker of more than 20 years Rebecca Jarrett-Dalton told Yahoo Finance this was the case with the Home Guarantee Scheme, which offered “cheaper levels of interest, you avoid lenders mortgage insurance, and borrowers can qualify with less of a deposit”.
The income threshold for singles is $125,000 or $200,000 for a couple.
"The quandary is you have to earn enough to be able to save, but if you earn too much you don't qualify for the home guarantee. So, you have to save more because you can't afford the scheme that allows you to have a smaller deposit," she said.
"It is extremely frustrating and I think that's part of the reason the scheme was expanded last July to include people who are buying together as friends. Prior to July 1, you had to prove you were a couple to even qualify.”
