The cost-of-living crisis in Australia

Rising costs, increased hardship

Escaping homelessness and hardship is becoming harder for everyday Australians as the cost-of-living crisis continues to bite.

The compounded impact of the financial and social events of the past few years means homelessness in Australia is fast becoming the reality for an increasing number of individuals and families, including more employed Australians.

Inflation, or the rising costs of living, are putting thousands of Aussies under immense financial hardship, making it impossible for many to make ends meet. These financial challenges affecting the community are also adding to the immense strain being faced by community services and assistance providers, who are struggling in their efforts to try and help individuals and families facing financial hardship and other effects and consequences of inflation.

How is the cost-of-living crisis affecting Australians?

According to government and research data, over 3.3 million Australians are currently living in poverty — that’s more than 1 in 8 people. Cost-of-living pressures are the biggest cause of stress for consumers, with the cost of affordable housing being the top concern in 2025, closely followed by food costs — meaning vulnerable Aussies are at breaking point.

The combination of reduced affordability and lack of adequate housing has exacerbated the risk of homelessness for low income and vulnerable families. Only 2.7 per cent of rental properties advertised in March 2024 were affordable to a two-parent two-child family, with both parents earning minimum wage and receiving the Parenting Payment.

Adding to this hardship is the volatile rental market, with vacancy rates at just 1.9 per cent and rental prices rising significantly — 6.4 per cent to the December quarter. Renters are being faced with impossible choices. 58 per cent of renters reported rent increases in 2024 — that’s an extra $53 per week or $230 per month.

In a bid to survive this hardship, more than 37 per cent cut of Aussies cut back on other living expenses, moved into cheaper housing (17 per cent) or shared housing (7 per cent) to sustain a roof over their heads. Over 42 per cent of renters claim they will struggle to pay rent over the next three months , and almost half (50 per cent) are worried about experiencing homelessness. Data shows a marked increase in the number of people reporting housing affordability stress as the main factor contributing to homelessness in recent times — an almost 36 per cent increase in the three years to 2023-2024.

30 per cent of mortgage holders claimed they will struggle to pay their mortgage over the next three months, and 56 per cent of Australians are more stressed about their finances this year compared to 2024.
 
15 per cent of Australian households have gone without essentials like food and heating due to a lack of income or money over the past three months, and 56 per cent of Australians are concerned they won't be able to afford essential food.