Parents are being forced to choose between paying rent and buying food as low income families struggle to make ends meet, a Bendigo financial counsellor says.
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Bendigo Family and Financial Services financial counsellor Jenny Elvey called for an increase in public housing after median rents climbed for four consecutive quarters last year.
“Some of our clients have to take housing that’s $300 or $350 a fortnight and they’re just not being able to make ends meet,” she said.
“It comes down to they either pay the rent or they buy food or they pay for the utilities.
“I see quite a few clients that just haven’t been able to do that and they get to the stage where they’re a couple of thousand dollars behind and they’ve just got no hope of catching up.”
Tenants in Bendigo are paying median rents of between $270 and $300 per week, which Ms Elvey said was unrealistic for a sole parent on the Newstart Allowance, for whom the maximum payment is just $566.30 a fortnight.
She said she saw many single parents who were being priced out of the market after being bumped off parenting payments when they’re youngest child turned eight.
“Once their children reach a certain age they go onto Newstart payments so they lose a few hundred dollars a fortnight, which is the difference between them being able to manage rent and not being able to,” she said.
“There seems to be quite a lot of rentals around about $300, $350 but is out of the reach of the majority of low income earners.”
Data released by PDR Nationwide Research reveals the length of time rental properties are on the market in Bendigo before being snapped up by tenants has dropped by almost two thirds since the beginning of last year.
Houses were on the market for just over a month on average in 2015, and Ms Elvey said it was even harder for people on low incomes to break into an already tight rental market.
“That is because a lot of the clients that we work with don’t have cars so they’ve got to somehow try and get to look at rentals,” she said.
“You go out a bit further to try and get something a bit cheaper but then you really need a car to be able to get children to school so that creates more issues.”
Ms Elvey said people in financial stress, including the unemployed, also often had trouble meeting real estate agents’ requirements, such as finding appropriate independent references or being able to house a family pet.
“If they’ve left previous places because they couldn’t afford it, sometimes their rental history can go against them, it’s just extremely hard for them,” she said.
“If they’re not working and they’ve got a few children and they’ve got a dog or a cat, they’re limited to what they can actually apply for, a lot of the houses don’t have really a secure yard so they can’t take pets. Often they can’t afford a holiday or anything so the pet is another thing that holds them together, it’s quite important for them.”
Low income earners are also facing increasing competition for housing with the data indicating each property attracted an average of 237 online visits last year, while vacancy rates declined over the 12 months to December.
The report calls the rental market in Bendigo “highly attractive and in-demand” for investors with rental yields sitting at 4.5 per cent for houses and 5.5 per cent for units, “indicating that the Bendigo market provides strong investment return for savvy investors”.
But Dungey Carter Ketterer property management director Josie Stewart disputed the figures, saying it was “still quite a challenging market” for investors.
“I think you’ll find some of these figures have relaxed a little bit because of the demand for property this time of year,” she said.
Ms Stewart said there were usually only a couple of potential tenants applying for any given property at the moment.
“Unless it’s a really high quality property that’s probably under-priced we’re finding there’s a lot of available properties and not as many people looking,” she said.
