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Younger adults are more susceptible to housing stress as costs of living and inflation surge, according to a new study published by the Australian Housing and Urban Research Institute (AHURI) and researchers from UNSW.
According to the study, age is the biggest predictor of the risk of entering housing stress, with adults under 25 being 214% more likely to struggle with housing costs than older adults aged 65 and above.
The likelihood of risk declines to 154% for those aged 25–34 and 156% for those aged 35–44.
Australians in the bottom 40% of income distribution and are spending more than 30% of their pre-tax income on housing costs are considered to be in housing stress.
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Employment status is the next biggest predictor after age, with unemployed people 144% more likely to enter housing stress than those in full-time employment. Not having a university education is associated with a 78% higher risk of entering housing stress.
UNSW Canberra’s Dr Milad Ghasri said those in stress are dealing with rising costs of living on top of the skyrocketing housing costs.
“Different critical life events occur at different ages, which can have an impact on household income and push people into housing stress,” he said.
Meanwhile the study also found that younger adults are more likely to recover from housing stress than those aged 65 and over.
“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.
Some critical events that are likely to increase the chances of adults entering housing stress are birth or adoption of a child, separation, marriage, giving care to a family member, and being made redundant from work.
The study also found that renters are 125% more likely to enter housing stress than owners. Furthermore, they are less likely to recover from the stress — in fact, the probability of recovering in the first year of entering the housing stress situation is 39.4% for renters and 48.9% for homeowners.
UNSW City Futures Research Centre Professor Hazel Easthope said the results of the study show how renting is not as secure as 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,” she said.
Professor Easthope said life events that impact housing stress can occur more rapidly for younger people who have not had a chance to build up the safety net to fall back on, such as savings from their career or support systems.
For instance, the most resilient to housing stress are those aged 65 and above who own their own home and those who have a postgraduate degree and are engaged in full-time employment.
“But the impact of housing stress can be extreme, no matter the age,” she said.
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