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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:
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.
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:
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!
Below are some things worth checking to ensure your rental circumstances are being handled fairly:
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.
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.
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.
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:
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.
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:
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.
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