Heading for disaster: Hard-up Aussies could be plunged into poverty within weeks as JobKeeper payments are scaled back and rent holidays come to an end - so how will the changes affect YOU?
- Digital Finance Analytics calculated 34.5 per cent of renters in financial stress
- That equated to 1.7million rental households who were unable to pay their bills
- Rent payment holidays and tenant eviction moratoriums ending in September
- JobKeeper fortnightly wage subsidies, JobSeeker boost also being scaled back
- Economist Martin North also fears a 35 per cent dive in Melbourne house prices
More than 1.7million renters propped up by JobKeeper wage subsidies are facing financial disaster within weeks.
Emergency measures introduced in March at the start of the COVID-19 pandemic are due to end in September.
The young and those with part-time jobs would be most at risk following the end of rent holidays and moratoriums on tenant evictions.
Digital Finance Analytics calculated 34.5 per cent of renters were in financial stress, where they couldn't pay their bills and had cash flow issues, despite the rent holidays, JobKeeper wage subsidies and the boost to unemployment benefits.
More than 1.7million renters propped up by JobKeeper wage subsidies are facing financial disaster within weeks. The young and those with part-time jobs would be most at risk following the end of rent holidays and moratoriums on tenant evictions. Pictured is a McDonald's in the Melbourne suburb of Laverton North being closed for coronavirus deep cleaning
In New South Wales, 48 per cent of renters are in dire straits where more money is going out than coming in, compared with 35 per cent in Victoria which is in a Stage 4 lockdown.
Across Australia, 1.7million rental households facing financial disaster at the end of next month.
Economist Martin North, the principal of Digital Finance Analytics, said the end of rental holidays and eviction moratoriums would be a particularly stressful time - with the young most at risk.
'Many people will be essentially under water when those support mechanisms drop,' he told Daily Mail Australia.
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'People are going to really struggle - younger people tend to be more caught in this, people with young families, and interestingly quite a proportion are people who have migrated to Australia relatively recently.
'This is a huge deal. It's very significant.'
Many renters were also confused about whether they had been given a six-month rental amnesty or were required to pay the arrears later.
'That's very unclear,' he said.
Digital Finance Analytics calculated 34.5 per cent of renters were in financial stress, where they couldn't pay their bills and had cash flow issues, despite the rent holidays, JobKeeper wage subsidies and the boost to unemployment benefits. Pictured is a house for lease in Melbourne
Tenants who have been relying on JobKeeper are at particular risk when the $1,500 a fortnight wage subsidies are scaled back on September 28 to $1,200 a fortnight for full-time workers and to $750 for part-time staff putting in less than 20 hours.
Digital Finance Analytics principal Martin North said young renters were particularly at risk
The unemployed from September 25 will also see their temporary $550 a fortnight coronavirus supplement reduced to $250 - taking overall JobSeeker benefits from $1,115.70 to $815.70.
Mr North said the federal government may have to revisit its planned winding down of JobKeeper and JobSeeker coronavirus supplements.
'This category of people who got support and it's eroding, the government is going to have to revisit this,' he said.
'I don't think we're in a position to take these down anything like as quickly.'
Tenants Victoria has also revealed 20 per cent of renters were too afraid to ask for a rent reduction, despite the eviction moratorium.
The group's chief executive Jennifer Beveridge has called for the eviction bans to be extended.
Tenants who have been relying on JobKeeper are at particular risk when the $1,500 a fortnight wage subsidies are scaled back on September 28 to $1,200 a fortnight for full-time workers and to $750 for part-time staff putting in less than 20 hours. Pictured is a closed shop in Melbourne
With residents of Melbourne in a Stage 4 lockdown, Mr North predicted median house prices in Australia's second biggest city could plunge by up 35 per cent during the next three years as Sydney's equivalent values fell by up to 18 per cent.
'If this virus goes on and we get another round or two, it could be more like 35 per cent,' he said.
The worst economic downturn since the 1930s Great Depression is also causing unemployment to climb.
The Reserve Bank of Australia is now forecasting a 10.5 per cent jobless rate - a level unseen since 1994.
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