When it comes to housing stress, young Australians are feeling the brunt of the hardship. Under 25-year-olds are 214 per cent more likely to struggle with housing stress compared to over 65s, a UNSW Canberra study suggests.

The recent report from the Australian Housing and Urban Research Institute (AHURI) led by UNSW Canberra, described the housing situation for adults under 25 as “bleak”.

The demographic of younger adults is estimated to be three times more likely to enter housing stress than those aged 65 and older.

The risk reduces to 154 per cent for those aged 25 to 34, and to 156 per cent for 35- to 44-year-olds. 

A person is considered to be in housing stress if they’re in the bottom 40 per cent of income distribution and their housing costs are more than 30 per cent of their before-tax income.

A predictive model was used to develop the findings of the report based on the “complexity of critical life events in interaction with household resources”.

Data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey was used to create the model. The HILDA Survey followed the lives of more than 17,000 Australians and was conducted between 2005 and 2018.

An array of critical life events can increase the likelihood of a person entering housing stress, including the birth or adoption of a child, separation, marriage, giving care to a family member, and being let go from employment or made redundant.

After age, the next largest predictor of housing stress is a person’s employment status.

Unemployed people are 144 per cent more likely to experience housing stress than those in full-time employment.

Additionally, not having a university education is associated with a 78 per cent higher risk of entering housing stress.

Lead author of the report, Dr Milad Ghasri, said impactful life events can occur at different ages, which can adversely affect household income and push people into stress.

“Using a risk-pathway model, we can detect, based on certain factors, which demographics might be likely to enter into housing stress following certain life events but are not yet eligible for support, and if they’re likely to recover from it without intervention,” Dr Ghasri said.

For Australian renters, the prospect of entering housing stress is 125 per cent more likely than a homeowner and they are also less likely to recover from it.

Statistics in the report show renters in their first year of housing stress are 39.4 per cent likely to recover, whereas homeowners are 48.9 per cent likely to recover.

Deputy director of UNSW’s City Futures Research Centre and report co-author, Professor Hazel Easthope, said: “Renting is much more insecure than homeownership. It’s a particularly insecure tenure in Australia, more so than in many other countries, because of our limited protections for renters, including allowing no-grounds terminations and unlimited rent increases.”

So, why is this the case?

Australians living in rentals, looking for work, and between the ages of 18 to 44 years of age are the groups most vulnerable to housing stress.

The groups most resilient to housing stress are people 65 and over who own their own home, have a postgraduate degree, and are engaged in full-time employment.

“Life events that impact housing stress can occur more rapidly for younger people who have not had a chance to build up their safety net to fall back on, such as savings from their career or support systems,” Professor Easthope said.

However, while younger adults are more likely to experience housing stress, they are also more likely to recover from it, the report suggests.

Adults aged 65 and above who enter housing stress are “much less likely to exit if they do”.

“For older people, if they use up all their resources, they may not be able to easily pivot in the job market or have certain obligations which make it less likely they will recover if they fall into housing stress following a critical life event,” Dr Ghasri said.

“A significant shortcoming of housing assistance is that it’s provided only once someone is in urgent need.

“Rather than stepping in once someone is already struggling, we can use modelling to shape early intervention policies, which may reduce the need for long-term assistance,” he said.

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