The missing middle in Australia’s rental market
Picture a 28-year-old woman and her five-year-old boy in need of housing following a family breakdown.
There are no other significant crises: just a mother and son in need of secure housing to get back on with their lives. Ideally, near a good public school. Without fear of being moved on.
I can’t imagine any reader disagrees with the base expectation that housing should be available to this family in South Australia.
Sadly, this family would be facing a lottery to be housed in 2025.
More realistically, the options facing this family would be couch surfing, bouncing between homes while attending dozens of soul-destroying rental inspections for homes they will never move into.
They could move to a distant community in pursuit of a cheaper rental but that means moving schools and leaving support networks.
Take away family support and they’re facing crisis accommodation which is not much more than a day-by-day saviour, meaning they don’t have to sleep in the car that night.
They’re lost in a system that we’ve always expected to be there: not in enough crisis for public housing, and not stable enough for market rental. Caught in the middle.
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Social housing figures consistently show that more than 60 per cent of tenants are over 65 years old, but there’s a missing story there. A large portion of these over 65s were housed when they were 28, or when they were in their mid-30s, post a break-up – some are couples housed in their 20s by a very different Housing Trust who never quite found a pathway into the broader housing market.
We know the story of public and social housing. The make-up of people tenanted since the 2000s has been very different from the past – and quite often this has been a result of very important progressive reforms such as the deinstitutionalisation of mental health and other social sectors.
But, whatever the reasons and context, this crisis has created a further pinch point in the rental market where overlapping cohorts are now competing for the same diminishing pool of rental housing.
This means that the public face of the crisis now is often people who previously had no need for an interface with the social and affordable housing sector.
This has had a perverse and devastating ripple effect. For example:
- A single working woman who had to sell out of a mortgage as rates got too big and now inexplicably can’t find a rental.
- A young professional without a family who can’t believe he’s in a position where his wage isn’t enough to pay a rental, even if he’s able to secure one.
- A 62-year-old widow with poor health whose super isn’t anywhere near enough to cover market rental.
A City of Onkaparinga Draft Housing Strategy debated this week showed a 61 per cent rental increase in the past five years, with 35.5 per cent of renters in rental stress (a definition where 30 per cent of income is spent of housing). This peaked at 49.9 per cent in some suburbs and the January 2025 vacancy rate of 0.49 per cent was a 73 per cent reduction since 2021.
The crisis is having a real impact on real people in a local government area that accounts for one in 10 South Australians.
Next week, some of the nation’s sharpest minds will be at Flinders University’s North Terrace campus for the second Don Dunstan Foundation Housing Symposium, focused on this rental policy area: its opportunities and its challenges.
The broader housing debate in Australia understandably often gravitates towards first home ownership and towards the challenges in getting into home ownership. Discussion promptly becomes about the great Australian dream and, ultimately, wealth creation.
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The greater housing crisis across the nation is in the ability to first obtain and then maintain secure rental accommodation.
We are not talking about crisis homelessness facilities or traditional public housing; we are talking about working people maintaining a rental near the kids’ school without the house being sold or the rent going up $200 a week.
There is little doubt that this crisis is the outcome of abject policy failure through most of the 21st century – a complete absence of policy to create or even facilitate any product or option sitting between social housing and the free private market.
This is where the optimism sparks.
The Federal Government initiatives of the last Parliament – through the creation of the Housing Australia Future Fund – have put governments (including state, territory and local) and the broader not-for-profit sector back in the space of affordable rental housing.
While a strong priority rightly remains on creating new dwellings for those most in need of public housing, there are billions of dollars in Federal Government partnership money to enable the creation of a new affordable rental asset class to play a significant role in housing delivery around the country.
The new policy settings allow for community housing providers, councils, faith-based organisations and community and multicultural organisations to make their land available for accommodation to be built and rented to income-assessed tenants with a 25 per cent rent subsidy.
Next Friday’s Dunstan Foundation symposium will unpack how South Australia makes best use of these opportunities, and what role each part of the housing sector (finance, landowner, builder, landlord) needs to play to make sure we target all tools at our disposal at this genuine crisis.
To go right back to the start, the five-year-old boy was me. A kid so fortunate his mum did get secure housing, near a good school, where they could rebuild their lives.
Next Friday, I’m in the room as a participant, working with a brilliant sector as it faces arguably its biggest challenge – growth in a crisis.
How does everyone charged with creating and delivering this new affordable rental housing reach a new level of capacity and find new community partnerships to both meet the challenge and realise the opportunity?
Matt Clemow is the chair of the Don Dunstan Foundation’s Committee of Management. He is the Founder/Director of Social Policy Solutions – a consultancy working with not-for-profit organisations. He is also a Director of both Junction and Kindred Australia.
For more information and tickets to the Foundation’s rental summit, head here.
