Are you one of the 30% or more Australians living in rented accommodation? If so, how are your finances right now?
The current nationwide rental crisis has hit tenants hard. Research to the end of December 2023 shows that over 70% of renters are registered as experiencing rental stress. This represents a significant portion of individuals and families struggling to meet their rent payments.
If it’s leaving you spending 30% or more of your household spending on rent, you’ve entered into rental stress territory.
If you fall into this statistic and are now in rent arrears from unpaid rent, don’t do nothing. Ignoring your rental debt will only make things worse. Instead, you must act fast and take advantage of the help available.
First, let’s take a quick look at why we’re experiencing a rental crisis.
Part of the wider housing crisis, the current rental crisis, is largely due to unsustainable rent increases. These increases have been driven by a combination of factors, including population growth, increased demand and a limited supply of rental housing.
This situation has only been exacerbated by rising property prices, stagnant wages and the climbing cost of living.
Recent data from CoreLogic estimates that national rents have increased 30.4% since July 2020. That’s the equivalent of an extra $137 a week for an average residence.
This is big, especially when you’re young, a low-income earner, a single-parent family or an older Australian on a fixed income.
When a significant portion of your income goes to your rent, you have limited funds to pay for other essentials, such as food, utilities and healthcare. This means something’s got to give, and not paying rent often becomes the relief.
Currently, approximately 43% of Australians are in a situation where they’re struggling to pay rent owing (Finder). It’s important to note that even if you're only one day late paying rent, you’re considered in arrears.
Rent arrears are considered a priority debt. This means they hold higher legal priority over other types of debt and have severe consequences:
Don't stick your head in the sand if you’re already in arrears or struggling to pay.
Avoiding the problem of overdue rent won’t help your situation; it can worsen it. The underlying stress is also a killer for your health and relationships.
Instead, take advantage of the help and support available to you:
Specialist financial experts can also provide valuable assistance when you're facing rent arrears or other financial difficulties, including:
If your financial situation is more complex, they can also guide you through other more formal insolvency options, including:
But while these can be effective, they’re not without risks.
A bankruptcy event or debt agreement will be recorded on your credit file, plus, some rental agreements and/or local laws may give the landlord the right to terminate your tenancy agreement. In certain cases a bankruptcy event may also affect your future applications.
This means seeking expert advice is crucial to help you make the right decision.
While experts say that Australia’s rental crisis has shown modest signs of easing and rental reforms have already been introduced, the reality of rental stress and arrears will likely remain a real issue for the foreseeable future.
But don’t be disheartened. Help and support are always available when you know where to look. There’s no need to suffer in silence.
By proactively engaging with resources and professionals, you can navigate the complexities of rental arrears and work toward maintaining 100% paid rent, housing stability and financial well-being.
If you’re struggling with rental arrears due to the current rental crisis, contact our team of debt solution specialists today on 1800 534 534 for professional, non-judgmental support and advice.