Study shows nearly two-thirds of tenants are concerned that higher interest rates will push up rents
A majority of Australian renters are worried that landlords will pass on rising mortgage costs through rent increases, according to new research by comparison site Finder.
The study found that 62% of tenants fear interest rate rises will translate into higher rents. Almost a third (31%) said their rent had already risen in the past six months and expected further increases, while another 31% anticipated a hike within the next six months.
"Landlords facing higher mortgage repayments are increasingly passing those costs onto tenants through rent increases," said Richard Whitten, money expert at Finder. "Many renters are already stretched thin and worry another hike could seriously impact their ability to cover everyday expenses."
Finder's Consumer Sentiment Tracker data for June showed that 47% of Australian tenants struggled to meet their rent payments, compared with 38% of homeowners who reported difficulty servicing their home loan.
Whitten (pictured right) said constrained housing supply was compounding the pressure on renters.
"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."
Around 9% of renters said their rent had already increased over the past six months but were not concerned about a further rise. Only 29% of renters said they were unconcerned about the impact of interest rate movements on their rent.
Whitten said ongoing rate uncertainty was weighing on renters' financial confidence. "Too many are living in fear of the next email or phone call from their landlord because another increase could blow a hole in an already stretched budget," he said.
"Building even a small emergency buffer, trimming non-essential spending and actively shopping around for better deals on bills can make the difference between coping with a rent rise or being caught off guard when it hits."
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