Two in three Australian retirees who rent in poverty, report says
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The news: Rising rents and falling home ownership have pushed two-thirds of renting retirees into poverty, a Grattan Institute report has found, warning the problem will worsen for future generations.
The context: The report comes ahead of what is expected to be a tight federal election, with both major parties under pressure to convince young renters and struggling retirees that they have viable housing solutions.
Rising interest rates, a severe housing shortage and rapid post-pandemic population growth have deepened Australia’s housing crisis.
The numbers: Two in three retirees who rent in the private market live in poverty, the report says, including more than three in four single women.
It also states that more than half of retired renters have less than $25,000 in savings, leaving many at risk of housing insecurity.
According to the SMH, rents have risen nearly 50% faster than rent assistance payments since 2001. While the national median rent reaching $620 per week in the December quarter, according to REA Group.
In Sydney, just 4% of single retirees on income support can afford a one-bedroom rental, the Grattan report showed.
The report calls for a $2 billion increase in rental assistance, including $500 million for retirees, funded by tightening superannuation tax breaks, curbing negative gearing and halving the capital gains tax discount.
Ahead of the election, Labor has pledged to build 1.2 million homes and attract more construction workers, while the Coalition has plans to restrict foreign property buyers.
What they said: Grattan Institute’s Brendan Coates warned that declining home ownership among poorer Australians would leave Gen X and younger generations worse off in retirement.
“Today’s low-income renters are tomorrow’s renting retirees,” he told The Sydney Morning Herald. “And whereas a third of retirees who rent today live in social housing, where rents are capped at 30% cent of income, far fewer can expect to do so in future because there simply isn’t enough social housing.”
The sources: Grattan Institute, Sydney Morning Herald, Bloomberg
