Australian renters form larger households as tight supply lifts competition and costs

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Australian renters form larger households

Highlights

Brisbane real estate agent Avi Khan reports one in five rental applications now come from multigenerational or group households, as supply tightens and rents rise.
The median weekly rent for a capital-city house has reached $700, with typical application numbers per property rising from 10 to up to 20 since May's federal budget.
Australia's national rental vacancy rate stands at 1 percent for the September quarter, with policy focus on buyers contributing to reduced supply and higher rents for the 31 percent of Australians who rent.

Rental pressure reshapes household arrangements

As reported by ABC News, extended families and friendship groups are increasingly combining households to improve their chances of securing scarce rental properties, as supply remains tight and weekly rents continue to climb. Brisbane real estate agent Avi Khan said multigenerational families and groups of friends now account for one in five rental applications to his agency, reflecting what he described as a major change in the makeup of rental households.

Khan said the number of applications per house has risen since May's federal budget, which he linked to changes to negative gearing and capital gains tax that he said have reduced investor appetite and worsened supply constraints. He said houses that previously drew about 10 applications are now attracting 15 to 20, while the median weekly rent for a capital-city house has reached $700.

For Perth renter Grady Toomath, the trend is less a lifestyle choice than a financial adjustment. He said the rent on the home he shares with his brother and another housemate has climbed to $760 a week from $315 when they moved in during 2019, forcing the household to accept a tighter living arrangement to stay afloat.

Policy focus leaves renters exposed

According to Domain, the national rental vacancy rate stands at 1 percent in the September quarter, meaning only one in 100 properties is available to lease, with capitals outside Sydney and Melbourne facing sharper shortages. Property economists say that scarcity is pushing the 31 percent of Australians who rent to find more flexible living arrangements as competition intensifies.

Lyndall Bryant, a senior lecturer in property economics at Queensland University of Technology, said government support has largely centered on buyers, including the Albanese government's expanded 5 percent deposit scheme, while renters have seen few direct solutions. She said recent tax changes are discouraging investment in residential property, freeing stock for first-home buyers but leaving renters with fewer landlords and higher prices.

The federal government increased Commonwealth Rental Assistance in 2023 and 2024 and agreed with state and territory leaders to move toward more nationally consistent rental rights. Unions and housing advocacy groups have also pushed for rent caps and multi-year lease agreements, while some landlords say rising interest rates, repairs and trade costs are making rent increases harder to avoid.

In our earlier article on the National Housing Expo in the Philippines, we looked at how DHSUD and the Pag-IBIG Fund were pooling thousands of housing options with on-site loan support and promotional financing to make homeownership more attainable. The piece highlighted discounted units, expanded loan limits and subsidized interest rates under the Expanded 4PH program as part of a broader push to increase supply and improve affordability for households.

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