Private rental market
Many older private renters are vulnerable and economically disadvantaged; a group who may rent out of necessity rather than choice (PC 2015). Renting privately may be problematic, particularly for older Australians in retirement. Renting in older ages can be associated with the risk of poverty and adverse impacts on health and wellbeing, and older people renting can be disproportionately affected by insecure tenures (PC 2015). Households experiencing less security of housing tenure are likely to be at an increased risk of homelessness (AIHW 2019). Furthermore, older households who rent can be more likely to move than those owning their homes outright. Research has shown that many older Australians strongly prefer to age in place, staying in their family home (PC 2015).
Australia has seen a decline in home ownership for older people, offset by an increase in the proportion of older Australians in the private rental market; increasing from 6% of all those 55 and over in 1995–96 to 12% in 2017–18 (ABS 2019). More older people in the rental market rent from a private landlord (70% of older renters) than from state or territory housing authorities (20%). When considering rental tenure by various age groupings, the proportion renting from state or territory housing authorities increases with age. Of older people renting in 2017–18, 16% of those aged 55–64 were renting from a state or territory housing authority, compared with 21% of those aged 65–74 and 29% of those aged 75 and over (ABS 2019).
Older households with low-income in the private rental market may be at greater risk of housing affordability stress. One measure of housing stress is the 30/40 rule, which focuses on low-income households and their housing costs. According to this rule, households in financial housing stress are lower-income households (lowest 40% of income distribution) that spend more than 30% of gross household income on housing costs (ABS 2019).
For low-income older households in the private rental market, the proportion of gross income spent on housing costs varied between older age groups (based on the reference person of the household) and family living arrangements. In 2017–18, housing costs as a proportion of gross income:
- was highest for lone person households aged 65 and over (44%); similar for lone person households aged 55–64 (43%)
- was higher for couple only households aged 65 and over (36%), than couple only households aged 55–64 (32%) (ABS 2019).
The impact of housing stress on older low-income renters may be different from younger low-income renters as they may have retired from the paid workforce, lack the capacity for future earnings and have low levels of wealth to draw upon. They also may have limited capacity to secure suitable housing that meets their changing needs (AHURI 2018). Further, older households with low-income may find it difficult to compete with higher-income households in the private rental market and may therefore seek assistance with housing costs or seek to rent a social housing property.
ABS (Australian Bureau of Statistics) 2017a. AIHW analysis of Census of Population and Housing, 1971 to 2016, customised report. Canberra: ABS.
ABS 2017b. Housing Occupancy and Costs, Australia, 2015–16. ABS cat. no. 4130.0. Canberra: ABS.
ABS 2019. Housing Occupancy and Costs, Australia, 2017–18. ABS cat. no. 4130.0. Canberra: ABS.
AHURI (Australian Housing and Urban Research Institute) 2018. Supporting older lower income tenants in the private rental sectorViewed 13 August 2019.
AIHW (Australian Institute of Health and Welfare) 2018. Housing Assistance in Australia 2018. Cat. no. HOU 296. Canberra: AIHW.
AIHW 2019. Housing Assistance in Australia 2019. Cat. no. HOU 315. Canberra: AIHW.
Parliament of Australia 2016. The Senate Economic References Committee. April 2016 'A husband is not a retirement plan'Achieving economic security for women in retirement.
Productivity Commission 2015. Housing decisions of older Australians, Commission Research Paper. Canberra: Productivity Commission.