The cost of renting a beach house may be the most obvious thing to see and the cheapest, but it’s not always the most economical option, according to a new report from the Australian Financial Services Union.
The report, released on Tuesday, warns that the cost of a beach home could be a major factor in many families choosing to live in the beach.
Photo: Daniel Munoz The report says it’s “highly likely” that families with children will spend more than $100,000 a year on accommodation and that “many families are finding it increasingly difficult to afford to live at home”.
“There is little doubt that families are increasingly using the cost and complexity of managing their lifestyle to access the best available rental options,” it said.
“This is particularly true for families with young children, as the cost structure of a family can be quite different to that of a non-parent household.”
The report highlights two major reasons why beach house rental rates are at their lowest levels in more than a decade.
First, the median price for a beach-front property is now about $2 million.
“The average annual income of a single person in Australia is currently $52,400,” it says.
“That figure is expected to grow by $5,400 over the next decade, but a family with children needs to spend about $5.6 million to afford a beachfront property.”
Second, the number of properties available has dropped by almost 60 per cent over the past five years.
This has been “not only due to the end of the global financial crisis, but also to the global economic downturn”, the report says.
It points to a number of factors, including the “great recession”, the “global economic downturn” and “the global economic slowdown”.
“The economic downturn is a significant factor in the declining number of homes available for rent and the rising number of families opting for more expensive options,” the report said.
The affordability of beach homes, the report concludes, is largely driven by the “purchasing power of Australia’s median income, which has increased by nearly 15 per cent since the start of the decade”.
The report also highlighted the “substantial savings” that can be made in renting a property.
“Many families can expect to save about $1 million on a property compared to the average family spending $1.3 million a year in accommodation,” it states.
“However, there is no guarantee that these savings will be available to every family.”
The survey was commissioned by the Australian Council of Social Services, which is a charity that works to support families in the housing market.
It was released ahead of the release of the National Housing Strategy in February.
“With the cost to households of renting and owning a property falling, it is time for governments and the community to start making real decisions about how to support the most vulnerable Australians,” its chief executive, Tim Pallas, said in a statement.
“Our data suggests that a number have found it increasingly hard to afford the cost, and that many families are looking for ways to save more money on their own.”
It recommends that “all states and territories adopt a rent control policy that would reduce the amount of rent that households would pay to the Government”.
“In some cases, the policy could be to make a small, voluntary payment that is paid by the taxpayer to the owner of the property, but would only be available for the period of the owner’s lease,” it added.
“Other states and territory governments could also adopt similar policies that could reduce the cost by 50 per cent or more to those in the market.”
The Australian Government said it welcomed the report and its findings.
“Australia’s rental market is among the most competitive in the world and there is clearly much room for the industry to continue to grow,” a spokesperson said.