Struggling renters should get flatmates or move home, RBA boss says

Despite high interest rates and the likelihood of another hike as inflation continues to soar, the housing market is showing signs of recovery in good news for owners.

But renters are stuck facing a short supply and the possibility of the biggest rent hike in decades.

Lowe urged people struggling with their payments to consider getting a flatmate or housemate, or moving back home.

He also suggested people rent out their spare rooms to help address the crisis.

“The way that this ends up fixing itself, unfortunately, is through higher housing prices and higher rents,” he said.

“Because as rents go up people decide not to move out of home, or you don’t have that home office, you get a flatmate.

“The increase in supply can’t happen immediately, but higher prices do lead people to economise on housing.”

Lowe said housing supply was the biggest challenge on the market, and that rents were expected to increase by 10 per cent.

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That would be the biggest jump since the 1980s.

But for homeowners, things are looking rosier.

The market is showing signs of recovery, with 1.2 per cent growth recorded in May.

Home values rose one per cent in Sydney, with prices up by almost $45,000 since January.

Brisbane and Perth prices increased by more than one per cent, while all other capitals recorded increases of less than one per cent.

Supply remains an issue here too, with the number of homes advertised for sale falling by almost 2000.