The mental health toll of Australia’s low-quality rental housing

Access to quality and secure housing is crucial for well-being. It provides stability and enables better physical and mental health outcomes.  

But CEDA analysis has found an alarming 38 per cent of private renters report their housing circumstance has a negative effect on their mental health, compared with 23 per cent of owner-occupiers.  

The share of people living in rental housing has grown over the past few decades, with approximately 30 per cent of households renting privately and a further 3.8 per cent renting social housing, according to 2021 Census data.  

Our analysis of The Australia Housing Conditions Dataset 2022 shows how tenure insecurity, poor energy efficiency and issues with mould and damp affect renters’ mental health.  

As the number of Australians renting continue to rise, we must do more to tackle these challenges and improve tenants’ quality of life. 

Long-term rental viability  

Australian renters are ranked equal lowest in overall tenure security along with Greek renters out of 31 OECD countries where data is available. Private renters in Australia have lived for a median of one to two years at their current residence, compared with five or more years for owner-occupiers.  

Less than a quarter of renters in the private market have a lease term of more than 12 months (Figure 1). While some people prefer more housing mobility, other households require more stability, so the rental market must be able to provide stronger tenure security and a range of options to suit diverse needs. 

Weak tenure security and short rental periods are concerning because the average mental health of private renters is lower than that of owner-occupiers until five to six years of tenure, after which the difference becomes indistinguishable.  

Stable and secure rental tenure thus protects mental health. The recent Senate Community Affairs References Committee’s Inquiry into the worsening rental crisis in Australia heard that lack of tenure security combined with short-term rental leases foster an environment of constant uncertainty, stress and anxiety for renters. 

Housing stability enables people to form a stronger sense of belonging and connection to their community, minimises unwanted job changes and encourages long-term investment in creating communities that are safer and better resourced. Enhanced tenure security and stronger tenant protection thus boost well-being and social and economic participation. 

Poor energy efficiency  

Cooling and heating difficulties are a common issue across all types of households. Thirty-seven per cent of private renters report difficulties keeping their house cool or warm, compared with 29 per cent of owner-occupiers. This is consistent with previous work indicating energy-related issues are common across the income distribution, yet lower-income households, the elderly, disabled, those facing housing insecurity and other vulnerable populations are disproportionately impacted and have less capacity to improve their housing circumstances.

Figures 2 and 3 illustrate that households in older dwellings face greater difficulty heating and cooling their homes. As a significant proportion of the population live in these older homes – particularly those built during the second half of the last century – it is critical that we tackle these energy difficulties to improve living standards, health outcomes and sustainability goals.  

Inability to adequately heat and cool homes can impact mental health due to physical discomfort, impact on sleep quality, stress and financial strain. Survey responses indicate that among those reporting difficulty with heating or cooling, 43 per cent said that their housing circumstance had a negative effect on their mental health, compared with 26 per cent among those who did not have difficulty with heating or cooling.

Battling structural issues such as mould and damp  

Mould and damp can be caused by cold indoor temperatures, poor ventilation and roof defects. Mould and damp can negatively affect health outcomes among occupants, for example by causing respiratory illnesses. Mould or dampness is reported among 43 per cent of private renters against 33 per cent of owner-occupiers. With renters more likely to face these health hazards and less ability to fix their causes, we must do more to address this problem.