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More renters requiring assistance than previously thought: report

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Erick LopezThe West Australian
Dr Maria Yanotti.
Camera IconDr Maria Yanotti. Credit: Gupi de Zavalia/Supplied.

A study undertaken on behalf of the Australian Housing and Urban Research Institute (AHURI) has found the amount of Australians receiving Commonwealth Rent Assistance (CRA) is far greater than commonly understood.

The report – titled The utility of new data in understanding housing insecurity – found that in 2016 nearly two million households received the rental assistance compared to the 1.3 million previously quoted by government agencies.

Author of the study and Senior Lecturer in Economics from the University of Tasmania Dr Maria Yanotti said the way the data was previously recorded did not accurately represent the true number of Australians on rental assistance.

“The quarterly and annual Department of Social Services reports count the number of recipients on one day,” she said.

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“These types of stock data, however, do not count the total number of individuals who received an income support payment over the period of a month, quarter or year.”

Dr Yanotti explained that “flow data” was more accurate, as many of the recipients of the rental benefits were only receiving the assistance for a short period of time, therefore, a snapshot data collection would exclude many from the figures.

“Fewer than one in five (19.7 per cent) had most recently been receiving CRA for over two years,” she said.

The findings found the number of people receiving CRA had gradually increased over time despite fewer recipients joining each year. Women were also more likely to receive longer CRA periods than men.

Dr Yanotti said the repercussions of COVID-19 would lead to further reliance on rental assistance and financial hardship for families across the country.

“The COVID-19 pandemic had a strong impact on people’s salaries and income, particularly for those working in the most vulnerable industries – such as hospitality, tourism, arts and entertainment,” she said.

“People relying on casual jobs, who tend to have lower incomes and higher job insecurity, have seen their income strongly affected. These also are more likely to be renters than owner-occupiers.

“The federal and state governments have put in place income support schemes and have protected tenants with emergency measures during the pandemic. However, these are all now vanishing.”

Realmark North Coastal Investment Manager Alan Baxendale said the end of the rental moratorium had left a shortage of rental properties and a lot of families struggling to find affordable housing.

“I’ve been in real estate for over 25 years, in sales and rentals,” he said. “I’ve never seen a market change so quickly.

“Rents have gone up in some cases 20 to 25 per cent, so tenants have realised they cannot afford to pay that but suddenly there’s nowhere for them to go – so I think the moratorium has backfired a little bit.

“I wouldn’t want to be trying to find a property to rent in Perth at the moment.”

Mr Baxendale said the current market was also affecting prospective investors as, “they’re not going to find a price which will work for them”.

Dr Yanotti pointed to a 2020 AHURI study which found more households had been exposed to affordability stress as government stimulus measures were wound back, and this figure would continue to rise despite the help of the CRA.

“[The report] indicates that as phase two income supports were reduced, 124,000 additional households have been exposed to housing affordability stress – 73 per cent of these are private renters – and that into 2021, CRA is not sufficient to buffer the effects of the economic downturn expected for low-income households,” she said.

Dr Yanotti said that as of December 2020 there were 1,655,000 CRA recipients, compared to 1,291,000 at the same time the previous year – though the point-in-time data would probably underestimate that total number.

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