How rising rents and property values are pushing Australians into share houses, granny flats and house-sitting

How rising rents and property values are pushing Australians into share houses, granny flats and house-sitting
  • PublishedOctober 6, 2023

At the age of 44, Mike Coates is flipping a stereotype and moving into a granny flat in his mother’s suburban backyard.

His situation speaks to a broader trend in Australia, where an ongoing rental crisis and rising property prices are pushing people across many demographics into share housing, house-sitting and secondary dwellings.

“A lot of people are struggling. I’m fortunate that I’ve had a mum that’s been able to do this for me,” Mike says.

Mike moved back into his mother’s home in Melbourne’s south one year ago after his long-term share house closer to the city disbanded.

While living in the spare room, he’s since applied for about 30 rentals for himself and his 10-year-old groodle Simba.

Sharing a kitchen and a living room with her son is getting old, so Mike’s mother is paying for the $100,000 one-bedroom granny flat going up in her backyard. 

“Fortunately, and unfortunately, I’ve ended up here,” Mike says.

a man infront of a granny flat
Mike Coates believes the granny flat is the closest he will come to owning a home.(ABC News: Emilia Terzon)

Mike believes he’ll be in the granny flat for several years to come.

New data released on Thursday on Australia’s rental market indicates his hunch might be warranted. 

The rental shortage is actually getting worse, not better, the data from property analytics company CoreLogic shows.

The number of rentals available is now at a record low, with just 1.1 per cent of available properties sitting vacant in September.

The median weekly rent has gone up by 30.4 per cent in just three years, with people paying $137 more a week on average now than in July 2020.

Housing has been one of the biggest factors driving up inflation.

Why is the rental market still so tight?

CoreLogic economist Eliza Owen says there is a shortfall of rental listings at a time when people are once again migrating to Australia in big numbers.

Another factors she attributes to the past three year’s rental crunch is a growing desire among people post-pandemic to live in bigger homes with fewer people.

Along with this, she says, there has been a shortfall in investors building new properties for renters as interest rates have risen. 

“You’ve got real volatility with the private rental market and with the more vulnerable lower-income households,” she says.

CoreLogic's head of Australian research Eliza Owen looks out of a window in an office
CoreLogic’s Eliza Owen says Australia’s rental market will remain dire, with limited properties available.(ABC News: Billy Cooper)

As this maelstrom continues, the anecdotal evidence is that Mike’s story is not isolated.

The company that sold his mother the $150,000 dwelling has been going for 20 years. In the past two, its customer base has noticeably changed.

“The granny flat is no longer just for the granny,” Matt Chapman from Granny Flats and Cabins Victoria says.

“We’ve been building a lot more for the kids coming back and the in-laws.

“Due to, obviously, rent prices going up.”

People walk through the front door of a house, past a For Lease sign.
Rents are steadily rising as more people compete for a limited number of available properties.(ABC News: Jack Fisher)

Matt believes that, as well as escaping high rents, younger people are also building in their parents’ backyards because owning their own property is out of reach.

CoreLogic’s latest data also shows property prices are heading back towards record highs in many cities, despite interest rates still sitting at a 10-year high.

“A granny flat is a lot cheaper than going out and buying a house,” Matt says.

Another company that sells flat-pack granny flats told ABC News that customer enquiries had doubled in the past 18 months.

“As a general national trend, I think people are doing this to curb their mortgages,” DIY Granny Flat co-owner Dean Roller says.

a builder inside a construction site
Business has picked up for companies which specialise in building granny flats.(ABC News: Emilia Terzon)

People turn to house-sitting to escape rising rents

It is not just younger people struggling in the Australian housing market’s new normal.

The number of women over 55 who are facing homelessness has also been rapidly growing.

Sue Leighton lives off the pension and a small amount of superannuation accrued in the years she wasn’t looking after her children.

Aged in her 60s, she doesn’t own a property, and she found herself homeless early in the pandemic after she left her rental to travel and the borders suddenly closed.

To keep a roof over her head, Sue turned to house-sitting, and she has been doing it ever since without paying rent in Australia and even in the United Kingdom.

“I’ve looked after a castle and was given a brand new electric car to drive. I just finished house-sitting a 10-acre property for six months,” she says.

However, Sue admits this lifestyle is a necessity. She thinks about having her own home and garden again, but the finances scare her. 

a woman on holiday with a sign
Sue Leighton has been house-sitting for the past three years, and has travelled the world doing it.(Supplied: Sue Leighton)

“I look at my bank account and go onto real estate listings, and start to have a mental breakdown. I don’t really think I have a choice at this moment,” she says.

“For me to pay rent, water, electricity and all of my bills would far exceed my income.

“I read the news daily about ladies my age living in their cars. I do feel lucky that I can just keep doing this. But my health is starting to fail and this worries me.”

ABC News has spoken to several others, including a single mother and grandparents, who are all looking at house-sitting as they find themselves between rentals.

After her rental finished in Melbourne, single mother-of-two Crystal Sharples has put up an advertisement on social media to try her luck at short-term house-sitting.

“[For now] we’ll be living with my ex-husband on his couch,” Crystal says.

“We have a good relationship and I don’t want to drive him nuts so we’re looking at house-sitting.”

a woman holding moving boxes
A tight rental market has Crystal Sharples looking at house-sitting as a temporary measure to put a roof over her head.(ABC News: Emilia Terzon)

Data from a global house-sitting website shows that demand has been rising in Australia since the pandemic.

Trusted Housesitters spokesperson Angela Law says this is due to pent-up demand for travelling and the new ability of many people to work remotely.

“It is not a recommended solution for short or long-term accommodation,” she advises.

“There are serious considerations around responsibility and commitments to caring for pets and homes which is the priority, not a free place to stay.”

a woman holding moving boxes
House-sitting means Crystal Sharples won’t be living on a couch in her ex-husband’s home.(ABC News: Emilia Terzon)

When could the rental market ease off?

CoreLogic economist Eliza Owen doesn’t have good news for renters in the short term.

“There’s going to be some pain as we continue to see strong flows of net overseas migration,” she says.

However, CoreLogic’s data shows the price of asking rents is no longer soaring as quickly, likely because households simply can’t pay anymore.

Ms Owen believes investors may get back into building new rentals in coming years, as economists predict that interest rates will ease off for lending.

She is also hopeful that new state and federal government initiatives surrounding social and public housing may ease the pressure on the most vulnerable renters.

Lastly, she notes that some people who left share houses during the past few years may be moving back into them, which will consolidate demand on rental stock.

Data from the Reserve Bank appears to be showing this reversal of a trend, too.

A sign for a person moving house with a to do list
Many Australians are consolidating their belongings as they head back to share houses.(ABC News: Emilia Terzon)

Back in Victoria, the roof just went onto Mike’s new home. This is the closest he thinks he’ll come to owning his own home unless his income as a courier substantially rises.

He’s preparing to move into it with Simba and feels lucky to have a parent offering this situation.

“Mum’s been great. She has been so patient,” he says.

Although, he and his mother joke that their next project will be building a six-metre-tall hedge in between the main house and the granny flat to give them both extra privacy.

a man and a dog on a couch
Mike and Simba won’t have to give up many of their creature comforts when they make their move.(ABC News: Emilia Terzon)

A closer look at rents and vacancy rates

CoreLogic also provides a deeper dive into where renting is more affordable or more costly, depending on different capital cities, and expensive across different suburbs in capital cities.

SOURCE: ABCNEWS

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