Renters forming larger and multi-family households to cover rising costs

Extended families and friends are banding together to secure rental properties as the market continues to tighten, with experts warning that this trend may leave some individuals behind.

For Perth renter Grady Toomath, sharing a home with his brother and another housemate has become a necessity rather than a lifestyle choice.

"I've been living here since 2019. When we moved in, the rent was $315 a week; [after] our latest rent increase it's $760 a week," he said.

That is a 141 per cent increase over seven years that comes as the rental market continues to tighten.

Brisbane real estate agent Avi Khan said multigenerational families and friendship groups accounted for one in five rental applications to his agency.

"The only choice that they have is they come together as a family unit or rent a property with their housemate, their flatmate, their friends, whoever it is. It's the massive shift that we're seeing," he said.

"We're seeing multiple couples applying for properties. People are applying with their mums and dads. So we're seeing the changing of the household unit."

Grady Toomath's living arrangement has stretched his budget a little further, but it has come with sacrifices.

"Three guys in a pretty small space, we've had to really adjust," he said.

"It's not entirely the lifestyle any of us wanted, but it's the lifestyle we can afford. So we help each other; we do what we can."

"We work together in this small space and try to just mind each other and be respectful in the way we can, but it's not what any of us really envisioned for our lives."

Mr Khan said the increase in group applications coincided with changes in the federal budget, which had eaten away at supply.

"Normally for a house, before the budget, we'll get 10 applications. We're [now] looking at 15, 20 applications for those homes," he said.

"They [the government] haven't considered the effect these changes will have downstream. So there's no one replacing those investors."

"That's why we're seeing real warning signs in the economy at the moment because where do these tenants go? They've got no other choices."

Renters squeezed amid home ownership focus

Lyndall Bryant, a senior lecturer in property economics at Queensland University of Technology, said renters have been overlooked.

"We've been seeing a lot of conversation about how to make housing more affordable for people who have a mortgage or are trying to buy," Dr Bryant said.

"But what we're not seeing is any solutions for the renters and unfortunately for them, the situation is only getting worse."

"We've seen billions of dollars put into social housing and community housing, but social and community housing is only between 3 and 5 per cent of our total housing stock."

In rough numbers, 25 per cent of all of our people who need housing are renters that rent into the private market. There just isn't enough stock for them.

The federal government increased Commonwealth Rental Assistance payments in 2023 and 2024 and has agreed, along with state and territory first ministers, to move toward more nationally consistent rental rights.

Unions and housing advocacy groups have also called for rental caps and multi-year lease agreements.

But Dr Bryant said the federal budget's tax changes have discouraged investment in housing, disadvantaging renters.

"Our current policy arrangement is that it's dis-incentivising investors from being in residential property and we don't have enough landlords, and they're exiting the market," she said.

"[It's] freeing up housing for first home buyers, which is really wonderful for first home buyers, but we still have this really large portion of the market that are renters and their prices are only going up."

Landlords also feeling squeezed

Sydney accountant Keegan Du Preez has nine investment properties across the country but also rents.

"I try and look after the tenant. It's in my best interest, plus it's in the tenant's best interest as well to lock in that rate because the market's only going to go up with rents," he said.

"So them locking in for 24 months helps them budget far better than if you have an increase every 12 months."

He said rent increases were a last resort, but property owners needed to cover expenses.

"Interest rates have spiked significantly; repair costs have gone up. Tradies, there's just a lack thereof, so all the tradies have put their prices up. So you have to compensate somewhere," he said.

"As landlords, we're not an endless pit of money."

"If it means that I go without for a month or two or three in order to look after my tenants, so be it."

"If that is what's required to make sure that the portfolio plus the tenants [are] looked after, that is a sacrifice that landlords sign up [for] the very first day that they buy the property as an investor."