Multi-family households now 20pc of rental applications, says realtor

Extended families and friends are teaming up to improve their chances of securing a rental property as tight supply forces prices higher, with experts warning the cohort is being left 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.

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 negative gearing and capital gains tax changes in May's federal budget, which had eaten away at supply.

"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

Federal and state governments offer several incentives to assist buyers to purchase their first home, including the Albanese government's expanded 5 per cent deposit scheme.

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

According to Domain, the national rental vacancy rate was at 1 per cent in the September quarter, with just one in 100 properties available to lease.

Capitals outside of Sydney and Melbourne experienced more severe supply shortages.

Agents and property economists said that has pushed the 31 per cent of Australians who rent to be more creative.

"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.

"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.

The 24-year-old said he appreciated the challenges of the market from both the landlord and tenant perspective.

"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."

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