9 September 2019

Seniors have been advised to act quickly and be prepared when they enter the rental market, following a new report which has outlined that record number of older Australians are under housing stress.

A recent report by the Australian Housing and Urban Research Institute (AHURI) looks at mortgage and rental stress and the implications for older Australians. The findings are not pretty.

It turns out that between 1987 and 2015, the real mortgage debt of home owners aged 55-plus blew out by 600%.

More worrying, among our over-55s, the average mortgage debt to income ratio has tripled from 71% to 211% over the last 30 or so years. This is pushing household budgets to breaking point, resulting in what AHURI describes as a “severe increase in repayment risk”.

At the same time, the AHURI report says that the number of renting seniors is also increasing.

Demand for Commonwealth Rent Assistance (CRA) is rising, and is projected to rise by 60%, from 414,000 households in 2016 to 664,000 in 2031.

The unmet demand for public housing from private renters aged 55 and over is expected to be especially high, reaching 440,000 households by 2031, a rise of 78% from current levels.

Seniors struggle to find suitable, affordable rental homes

The findings resonate with Katie Tilden-Bingham, Head of Property Management at Raine & Horne Gosford on the NSW Central Coast (pictured above), who says she has seen a strong increase in seniors looking for rental properties.

“In comparison to this time last year, we have seen at least at 50% increase in seniors actively looking for a rental property,” Katie says.

“It is definitely becoming increasingly difficult for seniors to find suitable properties.

“Not only do they have a specific criteria they need to meet, that is, little to no stairs or needing an elevator, and being close to shops and transport, seniors also need to find a property within their budget.”

Katie notes that it can be challenging for seniors to track down affordable rental properties that meet their specific needs.

“Finding a property under $400 per week that meets their criteria is near impossible, which affects the amount of properties that are available to seniors,” she says.

Applying for a rental can be nerve-wracking

Compounding the problem, many seniors are relative newcomers to renting.

“We have found some seniors to be a little apprehensive when looking,” Katie explains. “Often they were previously home owners, and are looking to rent for the first time, causing them concern as to whether they have enough history and supporting information when entering the rental world.”

“The rental process can therefore feel overwhelming. This is something we endeavour to alleviate, and make the transition as stress-free as possible.”

At Raine & Horne for instance, applicants are provided with their own Relationship Manager to help guide them through the application experience.

While not every senior will enjoy this level of support, there are steps over-55s can take to ensure they are at the top of the pecking order for a rental property.

Seniors can beat the odds

“It is crucial to have all references, identification and any other supporting documents ready to go before viewing properties,” advises Katie. “This helps to ensure seniors are ready to go as soon as they find a place they love.”

It also helps to become familiar with the online application process. Seniors who put their faith in the old process of completing a hard copy rental application and dropping it into an office in person can miss out. In the time taken, another applicant has probably already applied online.

“Often seniors miss out on a property that they most likely would have been approved for, because they are too late,” agrees Katie. “In a competitive rental market, getting comfortable using online application tools is crucial to ensuring your application gets read first.”

The key take-outs

For empty-nesters and seniors, downsizing a home can be an opportunity to escape mortgage stress. Figures from research group CoreLogic show that the markets in our two major cities – Sydney and Melbourne, are enjoying an upswing.

That makes now a good time to downsize to a more manageable home and get the mortgage monkey off your back.

Plans to sell and rent may seem appealing but it’s not always as easy as it sounds.

The key can be to keep tabs on the market – and this can be done by staying in touch with the rental listings on Downsizing.com.au. When a property comes up that ticks all your boxes, act fast and apply online.

By Anthony O'Brien, contributor to Downsizing.com.au