What are the real costs of the housing crisis for Australia’s young people?

On Youth Homelessness Matters Day 2023, this AHURI Brief explores what our housing crisis is costing Australia’s young people—the second brief in our series. In an environment of low rental vacancies and high rents, we find that more than ever before family support—or its absence—has become a major determinant of housing outcomes for young people. 

Expensive housing costs have an impact on all segments of Australian society, but younger adults and teenagers are affected particularly badly as they have fewer economic resources to use to pay high rents (or to consider buying a property). Even younger adults (aged 25 to 34), who are settling into professional careers, are struggling to pay for housing in the current economic and housing climate. 

Early career adults face major barriers to home ownership and are heavily reliant on family

AHURI research makes clear the importance of family support in helping early career adults to achieve stable housing. A 2021 research survey shows that 40 per cent of over 850 early career adults (aged 25–34) surveyed in Sydney and Perth expected family assistance, whether direct finance or in-kind, to help them to buy a house. More detailed qualitive research with 20 households across the two cities found that the 'ability to access such family support was the single biggest factor' in being able to buy a home and that support from family was an essential in being able to buy a home in Sydney.

This suggests that being able to access intergenerational wealth, rather than government assistance, is becoming the key pathway of entry into homeownership. In the long term, this means householders from families who are renting or from non-wealthy backgrounds are being excluded from home ownership.

Teenagers and younger adults (12 to 35) are experiencing the highest levels of homelessness 

For teenagers and young adults (aged 12 to 24), high housing costs have extra impacts, including issues of not being able to escape family violence or being able to stabilise life paths, as well as simply having the space to establish an identity independent from their family of origin.

The 2021 Census shows that young adults aged 19 to 24 years have the highest rate of homelessness of any age group, with 91 people of every 10,000 Australians aged 19–24 (and 53 of every 10,000 Australians aged 12-18) being homeless. Nearly one in four of all people experiencing homelessness (23%) is aged 12 to 24 years.

While the rate of homelessness for young adults aged 25 to 34 is slightly lower, at 70 people of every 10,000 Australians aged 24–34, the actual number of people aged 24–34 experiencing homelessness is very high, with the Census recording 25,504 people as being homeless (21% of all Australians recorded as homeless). 

Just over half (51%) of young people experiencing homelessness aged 12 to 24 years are living in severely crowded dwellings, as are 40 per cent of people aged 24–35 who are experiencing homelessness. The large proportion of homeless young Australians living in severely crowded dwellings strongly suggests that their homelessness is not the direct result of personal issues such as mental health or drug or alcohol problems but is due more to systemic problems such as low income levels and an insufficient quantity of affordable housing.

Source: ABS Census 2021. Estimating homelessness. Table 1.8 Homeless operational groups and other marginal housing, Number of persons by selected characteristics

Young people are staying in the family home longer—if they can 

The 2021 ABS Census reveals an increase in the proportion of young adults aged 15 to 24 who are staying on in the family home as either a dependent student or as a non-dependent child; in 2021, 69% of 15 to 24 year olds were living in the family home, up from 64% in 2011. The 2021 Census also shows a fall (since 2011) in the proportion of 15-to-24-year-olds living independently in group households or choosing to live as a married family. While COVID restrictions may have further reduced housing choices for these groups, even before COVID it is apparent that older children were tending to remain in the family home—with high housing costs a very probable cause.

Table 2: Increasing numbers of young people are living in the family home, from 2011 to 2021

Source: ABS Census 2021 G27 relationship in household by age by sex; ABS Census 2016 G23 relationship in household by age by sex (2 of 2); ABS Census 2011 B23 relationship in household by age by sex (2 of 2)

Young people aged under 25 are also at a severe disadvantage in the housing market as they tend to work in jobs that are lower paid (often part time and maybe combined with study commitments). Indeed, of the 2.1 million people studying for a certificate, diploma, or degree in 2022, 40 per cent were working part time and 23 per cent weren’t employed at all. As a result, ABS data shows that young people have annual employee earnings, on average, that are around half the earnings of those in the next age bracket (the 25 to 34 early career adults).

These low, on average, incomes may also help explain why young people are tending to stay in the family home and postpone forming their own independent households. 

Young people reliant on the Youth Allowance are at an even greater disadvantage as it is set at a rate that assumes young people aged 16 to 21 are living with or are financially supported by their families—however, for many young people, this is not the case. The benefits paid to independent (i.e., those unable to access family support) young people on Youth Allowance are lower than adult Jobseeker rates. For example, a single young person aged 18 deemed to be independent of their parents will receive $562.80 per fortnight while a single adult who receives Jobseeker will receive $693.10 per fortnight (as of March 2023).

Youth and young adult homelessness is significant for those without family support

For young people who don’t have a safe and supportive family environment in which to stay, or who experience levels of family violence, escaping from the family home is a key to their physical and emotional safety. But safe alternative housing is very difficult for them to access. 

AHURI research recognises the lack of appropriate, secure and safe housing options affordable for young people is a key contributor to homelessness'; this finding is further expanded in research from Melbourne City Mission which reveals that for those escaping violence in the home

(f)urther challenges exist for young people given the limitations on access to other forms of housing and the lack of recognition of their ability to exercise choice about where they lived… ‘Often young people would run away from home, couch surf and sleep at a friend’s house to escape violence in the home. However, this was often dismissed as misbehaviour, rather than a recognition of the ways the young people were attempting to keep themselves safe. … As put forward by one of the young people in the research “They (police) may not have thought where I was staying was safe, it was safer there than at home”.

The numbers of children and young people affected by family violence is significant across Australia, with, for example, in just one Australian State in 2022, Victoria Police attended over 17,000 cases where a young person aged between 10 and 24 years was affected by family violence caused by another family member.

Some young people (aged under 18 years) who have faced high levels of violence and trauma in their family of origin have been placed in state managed out-of-home care, living with caregivers on a short- or long-term basis. However, for most jurisdictions in Australia the duty of care by the state winds back after the young person turns age 18, although there can be some support services to help young people and their carers beyond that age, for example to age 21 in Victoria and age 25 in NSW. These supports may not directly cover housing costs that a young person may face, and homelessness is a real threat.

Young people leaving care experience poorer life and outcomes than their peers, with at least one-third experiencing homelessness and nearly two-thirds of homeless young people having lived previously in out-of-home care

AHURI research interviewing 77 young people who had experienced out-of-home care revealed only 18 were classified as successfully leaving care; 59 had a volatile experience either during and/or after leaving care, and of those, 20 were homeless at the time of the research. One of the main reasons for the high level of homelessness for young care leavers was that private rental was not affordable and they did not have the resources to secure and maintain housing.

Safe, affordable housing solutions are key to addressing future inequality

Having access to safe, affordable housing is very important to young adults; to provide a space of safety where they can gain education and develop an employment foundation that they can build on for the rest of their lives, and where they have a degree of independence that allows them to mature (particularly once they finish their education in their early 20s) without constrictions from their family of origin. 
It is essential that housing solutions for young people (especially youth aged 12–24) are tailored to provide for their safety, and that they are not merged within more general accommodation for the adult homeless population.

It is also of lasting importance that housing solutions are provided sooner rather than later for young people as 

the longer young people stay in homelessness, the higher the risk they will continue to experience it over the course of their life. Studies have shown the intergenerational impact of homelessness, including young people experiencing homelessness having an elevated risk of suicide, both as young people and later in life.

Increasing supply of housing that is affordable and well-located for the needs of all young adults—including those with jobs and supportive families—is key to enabling the next generation to gain education, become established in careers and ultimately to save toward home ownership and provide for their own retirement and the care of future generations.