8 ways to ease the stress of rising rent prices
The contents provided on this page are for informational purposes only and do not constitute financial advice. Consider your personal circumstances and objectives before making any financial decisions.
If you’re renting, you might be feeling the pressure of Australia’s current “rental crisis”. Add to that the rising cost of living and suddenly budgeting for your living expenses is so much harder than it previously was.
To support you with managing your finances, we’ve broken down 8 things you can do to ease the stress of rising rent prices so you can:
- Understand why rent prices are increasing.
- Know what strategies to use to manage rising rent prices.
- Know what resources and support are available to manage rising rent.
1. Understand what is contributing to the "rental crisis"
The Reserve Bank of Australia has implemented incremental increases to interest rates since May 2022, which has raised both home prices and mortgage repayments. As a result, rental prices are increasing to keep up and potential homebuyers are putting off their plans. Meanwhile, the cost of living is also continuing to rise, applying even more pressure to renters and homeowners alike.
On top of this, Australian households and the overall population is growing. According to the Australian Housing and Urban Research Institute, the country saw an 11.9% increase in new households between the 2016 and 2021 Census, particularly in single person households. That’s an average of 192,826 households per year!
Put simply, there’s a greater demand for rental properties, which is pushing up rental prices, and so here we are in a “rental crisis”.
How much you pay for rent depends on a few factors, such as location and dwelling type (i.e. house or apartment). In general, the median rent in Australia, according to Canstar, is $555 per week, and $577 per week in capital cities, which represents a 10.2% rise in rent prices throughout 2022.
2. Assess your current financial situation
Reviewing your current budget and financial situation can help you determine the best next step for you. Here are some things that might be helpful to review:
- How much of your income do you spend on rent?
As a general guide, the Australian Bureau of Statistics suggests that households should spend 30% or less of their gross income on housing costs (Australian Institute of Health and Welfare 2021).
- How much of your income do you spend on other living expenses?
These can include groceries and bills. Utilities expenses, for instance, have seen a gradual increase over the last 12 months, so you might want to compare how this has changed for you.
- Are there discretionary expenses you can cut back on?
These might be things like eating out less or cancelling subscriptions that you don’t use regularly.
- Can you continue to afford your current living situation?
Do you need to consider alternative living arrangements to help you better manage your finances?
3. Know your rights as a renter
Knowing your rights as a renter can help you manage your finances and your general financial wellbeing.
Each state in Australia has a different government body that manages renting regulations, so your rights and responsibilities may differ depending on where you live - we’ve linked them below!
- NSW: Fair Trading
- VIC: Consumer Affairs
- QLD: Residential Tenancies Authority
- SA: Consumer and Business Services
- WA: Consumer Protection
- TAS: Consumer Building and Occupational Services
- ACT: ACT Revenue Office
- NT: Consumer Affairs
Below are some things worth checking to ensure your rental circumstances are being handled fairly:
- How often your rent can be increased.
- How much notice you should receive from your landlord about a rent increase.
- Your right to negotiate with your landlord if you believe your rent is excessive.
- Your right to have your landlord respond to requests for repairs within a timely manner.
- Your right to a rent reduction.
4. Consider downsizing
Downsizing can look different depending on your current needs and circumstances. For example, if you have a family, it may be difficult to downsize to an apartment, but you might consider moving to a smaller home.
Moving to a smaller space could help reduce your living expenses, such as utilities costs. For instance, a smaller home means less space, which means it’s likely that you’ll spend less to heat or cool your home.
You could also use Beforepay’s Compare and Save to see if you could save by switching to a different electricity or broadband internet provider.
Cutting these extra costs can help you increase and manage your cash flow in the long run.
5. Living solo? Find a roommate!
Living with a roommate could be a good way to save costs if you’ve been renting alone. Having more people at home might increase how much you pay for things like your water and electricity, but could help you cut costs on rent and share the load for other expenses such as internet, streaming services and groceries.
There are some things you might want to consider before moving to a share house arrangement to make sure it works for you.
- Do you like living alone? Are you comfortable sharing your space with other people?
- Would you move in with a friend or a stranger? Make sure to ask the right questions to determine if you’re compatible and ensure a pleasant experience for everyone!
- If you move in with a friend, evaluate whether you could live with them without jeopardising your friendship.
- Decide on which bills you will share, and how you will arrange payments.
If possible, taking into consideration your work and other lifestyle factors, relocating to a different location could be a great way to save money on rental expenses.
Rent is generally higher in capital cities given the demand is higher. As of February 2023, Domain reported that just 0.8% of rental properties across Australia were vacant, and 0.7% in capital cities combined.
Moving to a less expensive area can increase your options when looking for affordable rent and make a significant difference in your monthly budget. But it’s important to factor in commuting costs and other expenses associated with the move.
Below are some resources you can try to help you find affordable rental properties.
7. Supplement with other income streams
If you’re able and up for it, side hustles and part-time jobs could be a good way to earn extra money to help support rising prices in rent, as well as utilities and other living expenses.
The rise of the gig economy means it’s now easier than ever to find additional work that is flexible, pays well, and works with your schedule. What you do depends on your skills and interests, but here are some ideas to get you thinking:
- Freelance work
- Online tutoring
- Pet- or house-sitting
- Food delivery
- Selling pre-loved clothes and other items online or at your local market
- Renting out space, such as a spare room, parking spot or storage.
Before committing to any side hustle or part-time gig, assess the time and effort you’ll have to put in and consider if it's worth the potential income.
8. Seek rental support
The Australian government offers several financial assistance programs to help if you are struggling with rent payments.
Rent Assistance is available if you currently receive certain payments from the government and pay rent. You also must be paying a minimum amount of rent, dependent on your living situation (i.e. single, couple), to be eligible for Rent Assistance. For every $1 of rent you pay above the defined amount, you’ll receive 75c to support you with your rent payments.
Visit the Services Australia website to find out more about Rent Assistance:
- Find out if you’re eligible here
- Find out about Rent Assistance rates and how much you could get here
- Find out how you can get Rent Assistance here.
If you are struggling with debt or finances, seeking help from a financial counsellor or advisor might help you with developing a budget and a plan to ease your financial stress. You can contact the National Debt Helpline and find out specific information about support with rent here.
Disclaimer: Beforepay Group Ltd, ABN: 63 6933 925 505. Beforepay allows eligible customers to access their pay and provides budgeting tools. Beforepay does not provide financial products, financial advice or credit products. The views provided in this article include factual information and the personal opinions of relevant Beforepay staff and do not constitute financial advice. Beforepay and its related bodies corporate make no representation or warranty, express or implied, as to the accuracy, completeness, timeliness or reliability of the contents of this blog post and do not accept any liability for any loss whatsoever arising from the use of this information. Please read our Terms of Service carefully before deciding whether to use any of our services.