Families skip meals to pay rent

RISING rents are forcing thousands of Australians to skip meals and deny their children school excursions, according to new research.

This came as another study showed there will be a massive increase in the number of renters over the next 40 years as housing becomes increasingly unaffordable to low-income earners.

Research by the Australian Housing and Urban Research Institute, based on surveys and interviews with 1400 renter households and 400 recent home purchasers, found that 26% of low-income renters surveyed sometimes go without food and 42% can't afford school excursions. Forty-seven per cent said that, even with improved income, rents would still be too high.

"Despite the government obsession with home ownership, private rental is the problem sector," institute researcher Terry Burke told the National Housing Conference in Sydney.

Many home owners pay their mortgage by taking second jobs, but Professor Burke said: "Any economic slowdown means they could lose those jobs and then you have thousands who are going to be in trouble. I suspect we are approaching that situation."

He criticised negative gearing, the first home owners' grant, capital gains tax and rent assistance as measures that add to demand for housing without boosting supply, but said he doubted the Federal Government would drop the policies.

A separate study presented at the conference, headed by housing analyst Judith Yates of Sydney University, projects that over the next 40 years, the number of households will increase by 50%, but the number of renters will almost double.

"In the future, as in the past, the majority of Australians will have affordable, secure housing over their lives," the study said. "(But) it will be increasingly difficult for low and moderate-income households who have deferred home purchase to become home owners. "The number of lower-income households in housing stress in the private rental market is expected to increase by 120%."

The study points out that home ownership rates are already falling among younger households. Between 1981 and 2006, the proportion of householders aged 35 to 44 who do not own their home has risen from 25% to 32%. The proportion aged 25 to 34 who are renting has swollen from 39% to 49%.

The Housing Industry Association forecast that in 2007-08 there would be hardly any growth in housing starts.

Housing Industry Association director Chris Lamont said housing starts had stalled at a level providing about 20,000 fewer homes a year than Australia needed. New rate rises would further restrict supply, putting more pressure on house prices and rents.

The Age
Sunanda Creagh and Tim Colebatch
February 22, 2008