Rent fears grow as tenants brace for higher costs

Nearly two in three Australian renters fear interest rate rises will push rents even higher, with many already struggling to keep up.

Millions of Australian renters are worried the next interest rate rise could end up costing them even more, with new research suggesting many already feel stretched by rising housing costs.

A Finder survey found 62 per cent of renters are concerned higher borrowing costs will lead to rent increases, while almost one in three (31 per cent) say their rent has already risen during the past six months and they fear another increase could be around the corner.

Another 31 per cent believe a rent rise is likely within the next six months.

Finder money expert Richard Whitten said many tenants believe they are feeling the knock-on effects of higher mortgage repayments.

“Landlords facing higher mortgage repayments are increasingly passing those costs onto tenants through rent increases,” Whitten said. “Many renters are already stretched thin and worry another hike could seriously impact their ability to cover everyday expenses.”

Nearly half struggled to pay rent

The financial pressure is already being felt, as Finder’s Consumer Sentiment Tracker found 47 per cent of renters struggled to pay their rent in June. By comparison, 38 per cent of homeowners said they had difficulty meeting their mortgage repayments.

Whitten said Australia’s tight rental market left many tenants with few realistic alternatives.

“Low vacancy rates mean renters often feel they have no choice but to accept higher costs or risk being homeless,” he said.

“For many Australians, moving is no longer a guaranteed way to save money on rent.”

While 9 per cent of renters said their rent had increased recently but they were not concerned about another rise, just 29 per cent said they were not worried about interest rates affecting future rent.

What renters can do

Although tenants cannot influence interest rates, Whitten said there are practical steps that may help soften the impact of future rent increases, and understanding tenancy laws in your state or territory is an important first step, particularly around notice periods and how rent increases must be communicated.

He also encouraged renters to negotiate where possible.

“A reliable, long-term tenant offers peace of mind to a landlord,” Whitten said.

Checking comparable rents in the local area can strengthen negotiations and may help reduce the size of any proposed increase. For those searching for a new home, presenting a renter’s resume, including strong references and a short cover letter, may also improve the chances of securing a property in Australia’s highly competitive rental market.

Check out Renters Fearful of Speaking Up About Rental Repairs