Rental-Insights-A-COVID-19-Collection - Flipbook - Page 10
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RENTAL INSIGHTS:
DETERIORATING
RENTAL AFFORDABILITY
DETERIORATING RENTAL AFFORDABILITY
Michelle Baddeley
University of Technology
Sydney
Retrenched renters
vulnerable to long-term
inequality
Key findings
Why is it important?
Who is most affected?
Retrenched renters
are struggling with
immediate pressures
on household finances,
and are more likely than
not- retrenched renters
to be struggling with
bills and accumulating
increasing debt.
While current economic policy focuses
on managing the short-term impacts
of the COVID-19 crisis, the long-term
economic and financial fallout is likely
to be large and especially overwhelming
for vulnerable groups, including renters.
From a sub-sample of n=11,062 renters
from the ARHCD survey, 538 (4.9%)
had experienced retrenchment; 10,524
had not. Comparing the background
and experiences of the two groups—
the retrenched versus not-retrenched
renters were similar in terms of age
(modal age for both groups was 30–49
years old), household income (modal
income range $9,001–$90,000), and
the condition of their rental properties
(modal property condition ranking of
‘good’ for both groups). Wellbeing was
also similar across the two groups
(modal rating of ‘no change’ from
COVID-19 for both groups).
Over the long term, retrenched renters
will be significantly more vulnerable
to rising inequality because of their
relatively high rates of superannuation
withdrawal and dis-saving.
Data from the Australian Rental
Housing Conditions Dataset (ARHCD)
shows that retrenched renters are
significantly more vulnerable than notretrenched renters to the economic
and financial hurdles associated with
the COVID-19 crisis. Specifically,
the ARHCD captures evidence that
retrenched renters are facing significant
economic challenges over the long term
as well as the short term because, not
only are they struggling to pay their bills
today, they are also vulnerable to rising
inequality over their lifetimes. Relative
to not-retrenched renters, they have
high rates of superannuation withdrawal
and are more likely to have spent-down
their savings.
They are also vulnerable in terms of
their physical and mental health—
serious problems in themselves, and
exacerbated because poor mental
and physical health will erode future
employment chances.
However, there was one critical
difference in terms of the impacts
of current housing circumstances
on renters’ finances over the past
12 months (i.e. including many
months of pre-COVID-19 conditions).
Pre-COVID-19, retrenched renters
were already struggling more than
the not-retrenched renters—with an
average response that their housing
circumstances had negatively impacted
on their finances over the past year,
relative to an average response of ‘no
impact’ for the not-retrenched renters.
So retrenched renters were already
financially vulnerable even before
the COVID-19 crisis hit.
… the long-term economic and financial
fallout is likely to be large …
