A growing number of Australian retirees who rent in the private market are living in poverty, with many struggling to afford housing as they age. A new report from the Grattan Institute highlights the increasing financial pressure on older renters, warning that the situation is set to deteriorate unless urgent policy changes are made.
The report found that two in three retirees who rent privately live below the poverty line, and half of all older renters have savings of less than $25,000. With declining rates of home ownership among middle-aged Australians, the number of older people facing rental stress is expected to grow in the coming years.
Financial hardship among retired renters
According to the Grattan Institute, Australia’s housing affordability crisis is hitting retirees particularly hard. While many older Australians rely on their homes as a financial safety net, those who rent privately face ongoing financial insecurity in retirement.
The report reveals that among the poorest 40 per cent of Australians aged 55 to 64, median net financial wealth is less than $40,000—a sum that offers little protection against rising rents. For those already retired and renting, financial hardship is widespread, with the vast majority dependent on government support payments that do not cover housing costs.
Although the federal government has increased Commonwealth Rent Assistance (CRA) by 27 per cent in recent years, the Grattan Institute argues that the increase remains insufficient. Even with this support, a single retiree relying on income support can afford only:
- 4 per cent of one-bedroom rental properties in Sydney
- 13 per cent in Brisbane
- 14 per cent in Melbourne
Policy recommendations and economic impact
To address the crisis, the report’s lead author, Brendan Coates, has called for a 50 per cent increase in rent assistance for singles and a 40 per cent increase for couples. This adjustment, costing an estimated $2 billion annually, would enable retirees to rent at least 25 per cent of the cheapest one-bedroom properties in major cities.
The report suggests that the cost of increased rent assistance could be offset by reforming tax policies, including:
- Tightening superannuation tax breaks
- Curbing negative gearing, which allows investors to claim deductions on rental losses
- Halving the capital gains tax discount, which reduces tax on profits from asset sales
These measures, the report argues, would not only help fund additional rent assistance but also address broader inequalities in Australia’s housing market.
Without substantial intervention, the number of renting retirees at risk of homelessness will continue to rise. “Australia is failing too many retirees who rent,” Coates said. “Only a further substantial boost to rent assistance can ensure that all Australians get the dignified retirement they deserve.”
