Trends over the last decade show that housing security for the elderly in Australia is becoming a major problem. The rise in the supply of investment properties in Sydney and Melbourne has made the private rental market more competitive, hence locking out those who cannot afford them.

"The (private rental market) is fundamentally expensive and not adapted to people as they age," said Jeff Fiedler, national development manager at Housing for the Aged Action Group (HAAG). "It can become an absolute death trap for an older person once they reach retirement, and they become reliant on an age pension."

Retired women are the one who are most at risk, especially if they are single. They usually retire with little to no assets due to broken careers brought about by family responsibilities, hence giving them little superannuation. If they are divorced and their husbands own the house, they are left with no other choice but to rent.

And with longer waiting lists for community housing, more older people than ever are renting. In 2011, 85,000 retirees were forced to rent their homes, and the numbers are expected to jump this year to 120,000.

"The average rent for a one-bedroom flat in Melbourne is now $320 per week—that would take more than 65 per cent of an aged person's pension," Fiedler said. "This means that people are going without essentials such as food and having trouble paying bills. They will often, as a result, suffer ill health."

HAAG has since prompted the government to develop a housing strategy to prevent poverty in retirement.