Single parents living in a rented apartment are said to be among the Australians most prone to financial peril, according to wide-ranging study of Australian households.
Meanwhile the number of renters able to transition into ownership has almost halved in 10 years, the 13th Melbourne Institute HILDA survey shows, and the “plight of renters” is growing.
More broadly, the number of renters has also leapt as housing affordability has worsened, according to the report’s co-author Roger Wilkins, and fewer are on an active path to home ownership.
“Renters, especially younger ones, are finding it more difficult to own a home,” Professor Wilkins said.
“Over the survey period the number of renters aged between 18 to 24 transitioning into home ownership dropped from 13.5 per cent to 7.6 per cent.”
Professor Wilkins said renters still clearly aspire to buy, spurred by a dissatisfaction with renting.
Single parents struggling
Renting was most common among single-parent families, the report showed, while single-parent families were particularly prone to financial stress.
The report made special mention of “those living in a town or city of 100,000 or more people, single-parent and single-person households, those with a child with a disability, people with a household member in poor general health and/or in poor mental health, and renters in the private rental market”.
The report showed rising childcare costs also increasingly hurt the financial standings of single parents.
In 2005, couple parents spent an average of $67 per child on child care, while single-parent families spent $39.
Now, childcare costs per child have increased to $122 for couple families and $81 for single-parent families.
“This translates to an 81 per cent increase for couple parents and a 108 per cent increase for single parents,” the report stated.
“The considerable rise in childcare costs per child indicates that changes in the number of children per family using care are not responsible for the large increase in overall childcare costs.”
Demographics Group director of research Simon Kuestenmacher said the report’s findings were not surprising.
Mr Kuestenmacher said a large part of the perennial affordability problem came down to the dual issues of wanting baby boomers to build assets and wanting young people to buy a place to live.
“In Australia you can’t have both,” he said.
The parallel trend of rising student numbers and temporary workers in Australia only made the rental affordability issue worse, Mr Kuestenmacher said.
Professor Wilkins echoed the sentiment, stating, “objectively, renting is a poor substitute for home ownership”.
The HILDA report showed those who lived in apartments were worst off for financial stress, followed by those in semi-detached houses.
Australians in the suburbs in fully detached houses were doing the best, with only 8.5 per cent in financially stressful conditions.
For the first time the report also showed poverty in Australia was increasing, with a small uptick from 3.4 to 3.6 per cent between 2015-16, although child poverty is at its lowest in the survey’s history.