Australia’s rental crisis is forcing young mothers to raise newborns in sharehouses while other parents are choosing to move into caravans because of steep rental increases, a Senate inquiry has heard.
The inquiry on Wednesday heard that almost 650,000 households across Australia were in severe housing stress, with stories of renters struggling amid soaring prices and low vacancy rates.
One woman, Ada, told the inquiry she was raising her newborn baby in a sharehouse because she could not find a home in Canberra, despite working full-time for the public service.
She has put bubble wrap on the windows of the nursery and covered vents so she can heat the room to a comfortable temperature for her baby.
“That is not an environment I wanted to be having a baby in,” she told the Senate inquiry into the rental crisis.
Another mother, who did not want to be named, said her rent will soon be increasing and she has decided to move with her two daughters, 10 and four, into a caravan.
“My rent is going up in October by about $16 a fortnight and that was when I made the decision that I’m not going to be able to cover it,” she told the inquiry.
The single mother said she was on the public housing waitlist but it could take years to secure a home. She said she was worried about her daughters living in such a small dwelling when they move, as her eldest has autism and needs space.
“That’s my main worry. I’m nervous,” she said. “But I’m actually hoping that when I do move that I’ll feel relief financially. I really want to study next year. I want to show my kids that you can still do things, no matter how far along you are in life.”
Investor tax breaks in focus
The inquiry also heard that tax concessions for property investors are making the housing crisis worse and effectively locking younger generations out of home ownership.
Everybody’s Home spokesperson Maiy Azize said rents had jumped 34% across Australia since the start of the pandemic.
Azize said federal housing and tax policies largely made affordability worse, not better.
She called for limits on negative gearing and for capital gains tax discounts to be incrementally reduced over the next 10 years.
“It’s $157bn that is going to be lost to the budget over the next 10 years from negative gearing and tax concessions,” Azize said.
“Imagine what that money could do for social and affordable housing in Australia.”
In Australia, 1% of all taxpayers own a quarter of all investment properties across the country.
Azize said the argument that landlords were forced to pass on interest rises to renters was false as losses can be written off at tax time.
The most recent Australia Tax Office data shows that of the 2.2 million landlords who reported “net rent” in 2020-21, 1.7 million of them reported interest deductions.
“If you’re a landlord, you can actually write off the losses that you get from interest rate increases and other costs that you’ve got going up,” Aziz said. “Renters have nothing like that kind of support.”
Aziz said the housing crisis was not only a matter of supply, as Australia had built 1m homes in the past 10 years, outstripping population growth.
“It’s a widespread view in government that all we need is more supply and that will trickle down, put downward pressure and, in this magical way, create affordable housing,” she said.
This sentiment was echoed by Emma Greenhalgh, the chief executive of National Shelter, who welcomed the government’s target of 1.2m homes built over five years but said there needed to be more focus on social and affordable housing.
“We want to see 10%, or up to 25,000, social and affordable homes built a year,” Greenhalgh said. “That’s the scale of investment that we need to see from the governments ... to respond to the need.”
Homelessness Australia has recently warned of a huge jump in people accessing their services each month, largely driven by rent increases.
The inquiry is being held ahead of a vote on the federal government’s housing bill, which is due to return to parliament in October.
