How an immigration surge is forcing more people into share house living

More older Australians and couples will move into shared homes as rising immigration exacerbates the housing crisis, a university study has found.

The return of international students means the Treasury predicts a record 400,000 migrants will move to Australia in the year to June.

A study from the University of Sydney predicted that unaffordable rent would force more elderly people to move into housing.

“It is likely that future sharers will be more demographically diverse than they were in the past,” it said.

Report authors Nicole Gurra, Zahra Nasreen and Pranita Shresth from the School of Architecture, Design and Planning said that without more government social housing, shared home living would be more common than just young people leaving home and those on low incomes .

“Our research shows that a variety of people throughout their lives are now seeking shared living space through online platforms in the absence of adequate government responses to unmet housing needs,” they said.

“The longer-term implications of this study add to the extensive research that shows that policy intervention is needed to support and subsidize affordable rental housing in high-demand locations.”

A surge of online listings mentioning couples has also highlighted how even people with a spouse or partner struggle in the rental market.

“The presence of couples and groups in our sample highlights the diversity of people seeking shared accommodation and implies a serious shortage of accommodation that is affordable or available even for dual-income households,” the study said.

Their analysis, based on advertisements on flatmates.com.au, has been released as the Greens and Coalition continue to block Prime Minister Anthony Albanese’s $10 billion Housing Australia Future Fund from building 30,000 homes over five years.

Mr Albanese met state and territory prime ministers on Wednesday to discuss Australia’s housing crisis, with the Commonwealth constitutionally unable to intervene in the rental market.

Following that discussion in the national cabinet, the prime minister pledged to work with states and territories to build 1.2 million new homes over the next five years to combat the national housing crisis.

At the 2021 Census, 4 percent of Sydney households were classified as group living, but this rose to 10.8 percent in inner-city areas

Sydney is Australia’s most expensive rental market with median weekly unit rent in the year to July rising 24.1 percent to $666.39, while equivalent house rent rose 15.9 percent to $963.92, data showed from SQM Research.

The city’s rental vacancy rate is still low at 1.6 percent, while Sydney’s population has grown at an average annual rate of 2 percent over the past decade, “primarily driven by international migration.”

Sydney’s median home price of $1.334 million, based on CoreLogic numbers, is also out of reach for an average full-time worker who earns $94,000 a year.

Someone would have to make $178,000, or be in a dual-income relationship, to pay off a million-dollar loan, with a 20 percent mortgage, and avoid mortgage stress when a borrower owes the bank more than six times the amount owed. .

“The increasing barriers to homeownership and a shortage of affordable rental supply due to the wider financialization of housing and welfare state reforms mean that sharing is likely to play an increasingly important role,” the study said.

At the 2021 census, 4 per cent of Sydney households were classified as group living, but this rose to 10.8 per cent in inner-city areas.

“This continued demand for shared housing means that in expensive cities such as Sydney, affordability pressures are sufficient to outweigh preferences for privacy, autonomy or convenience,” the study said.

ANZ has issued a new warning about construction company collapses exacerbating the housing crisis.

Senior economist Adelaide Timbrell said higher interest rates at a time of increased construction costs would exacerbate the housing shortage.

ANZ has issued a new warning about construction company collapses exacerbating the housing crisis (pictured is a construction site linked to Western Luxury Homes that has been placed under administration)

ANZ senior economist Adelaide Timbrell said higher interest rates at a time of rising construction costs would exacerbate the housing shortage

“Developers’ incentives to add to supply have been undermined by higher borrowing costs, extended construction times and the construction industry’s higher risk amid a higher rate of recent insolvencies,” she said.

“While we don’t expect residential construction to survive an ‘abyss’, we also don’t expect growth in construction from here, as the negatives of higher borrowing costs outweigh the positives of strong demand growth.”

ANZ expects national property prices to rise by five to six percent in 2023, despite the Reserve Bank’s 12 rate hikes since May 2022, pushing cash rates to an 11-year high of 4.1 percent.

This will be followed by a growth of three percent in 2024 and a growth of four to five percent in 2025.

“The impact of housing shortages and tight rental vacancy rates currently outweighs the impact of cash interest rate hikes,” Ms Timbrell said.

Outgoing Reserve Bank governor Philip Lowe, responsible for the most aggressive rate hikes since 1989, told a Senate hearing in May that higher rents would push more people into shared housing, noting housing supply has not kept pace with population growth.

“As rents go up, people decide not to move out, or if you don’t have that home office, you get a roommate,” he said.

‘Higher prices do lead to people cutting back on housing.

“Kids don’t move out because the rent is too expensive, so you decide to get a roommate or roommate because that’s the pricing mechanism.”