Reuters has published a terrific chart showing how Australian wages have fallen well behind both CPI inflation and rents:
Tim Beattie, a 62-year-old former soldier, cannot afford rental housing and has been forced into share housing.
He told Reuters: “There used to be a such thing as a middle class, but now that’s gone”.
Around one third of Australians are tenants and they are being smashed hard by the hyperinflation of rents over the past two years amid the record surge in net overseas migration:
Moreover, the situation facing renters will only get worse as immigration demand meets falling housing construction.
As explained by PropTrack on Monday:
“The rapid rate of migration to Australia is exacerbating competition for rentals, with the majority of arrivals not owning property”.
“Construction remains a challenge, with high build costs, limited labour availability and decade-high financing costs resulting in dwelling approvals and commencements sitting at their lowest level in a decade”.
“It seems unlikely that these conditions will change any time soon given population growth, the lack of significant new housing supply and the overall strong demand for rentals”.
“From here, we expect rents will continue to climb in the major capital cities due to persistent low supply and strong demand which is being exacerbated by the rapid rate of population growth”.
The third of households with mortgages are also suffering.
The latest cost-of-living survey from the ABS showed that mortgage interest payments almost doubled in the year to June:
In turn, employee households’ living expenses increased by 9.6% in the year to June, which was nearly triple the 3.6% growth in wages.
Roy Morgan data also shows that 30.2% of owner-occupied households with mortgages are “stressed”, which is the highest share since October 2008 when the official cash rate was 3.0% higher at 7.25%:
Whether you are a renter or a mortgage holder, you are copping it in the neck right now.
And thanks to the Albanese government’s extreme immigration program, the pressure on rents, house prices, inflation and interest rates will continue.
We are witnessing the slow death of Australia’s middle class.
