COVID-19 and mortgage and rental payments: May 2020
Abstract
There is little high quality nationally representative data on the level of housing stress being experienced during the COVID-19 period or on the extent to which Australians have been able to reduce their mortgage and rent payment in light of government policies enabling this. The data reported in this paper shows that between April and May 2020 the proportion of Australians reporting that they had not been able to pay their mortgage or rent on time increased from 6.9 per cent in April to 15.1 per cent in May. The level of housing stress is substantially higher for renters than amongst mortgage holders, though this can be explained mainly by differences in socioeconomic outcomes between renters and mortgage holders. Young adults are experiencing very high rates of housing stress with 44.0 per cent of renters aged 18-24 years not being able to pay their rent on time. Importantly, this high rate of housing stress remains even after controlling for levels and changes in income. For renters, the level of housing stress is much higher for the lower income group than for the higher income group with the rate of not being able to pay rent on time being four times as higher for the lowest income quintile compared to the highest income quintile. A large majority of those who have attempted to re-negotiate or freeze mortgage or rental payments have been successful. 16.1 per cent of mortgage holders have managed to reduce their mortgage payment and 8.0 per cent have had their payments frozen for a period of time. Lower, but still a substantial proportion, of renters have negotiated a lower rent (10.5 per cent) or rental freeze (2.0 per cent).