Young people are saving on rent by staying at home longer, but ‘you pay with your mental health’

In the face of Australia’s housing crisis and current cost-of-living pressures, young people today continue to miss out on housing opportunities earlier generations could largely grasp.

The prospect of owning a home in the foreseeable future is out of reach for many young people. Census data shows rates of young adults buying a home have been declining since the 1980s.

But even an affordable rental property is not a given, with younger age the strongest predictor of “rental stress” – paying more in rent than is deemed liveable by standard measures.

In our own research, published last year, we interviewed female and gender diverse Australians aged between 18 and 30 about their housing experiences. Many, such as this woman in her late 20s, described the mental toll of housing precarity:

The constant cycle of living in a place for a year, getting a massive rent increase, having to find a new place and move again is exhausting, financially unsustainable and demoralising.

For young adults, unmet housing aspirations can negatively affect identity, mental health and wellbeing, and their ability to plan for the future.

What’s more, all this means young people often live at home with their parents for longer than in years gone by, which, for some, can present additional challenges.

How does staying at home longer affect wellbeing?

Recent Australian survey data showed 54% of young men aged 18–29 and 47% of young women in the same age group are still living under the same roof as at least one of their parents.

For some young adults, multigenerational living for longer periods works well, even when driven by the cost of living. They may benefit from a mix of private and shared spaces in the family home, and extra care and support.

For other young adults, the inability to secure affordable, accessible and independent housing can affect mental health and wellbeing. As a woman in her late 20s told us in our 2024 research:

It’s like you don’t pay with money to live with family […] but you pay with your mental health.

Another participant, a non-binary person in their early 20s, explained:

Even now I’m like learning how to like be my own person while still being under my parents’ roof […] still living at home is a bit emotionally kind of weird.

Young people aren’t the only generation affected

The impacts of declining housing affordability are intergenerational. Parents of young adults may now be at midlife, and facing their own difficulties. Many midlife adults are approaching retirement age with mortgages or rental costs.

Some in this demographic, sometimes called the “sandwich generation”, may be living with and caring for older generations, and perhaps children as well.

Young people, too, sometimes need to provide in-home care and housing-related financial support for older family members. One participant in our research, a young woman in her early 20s, acutely felt the burden of helping her single mother pay the mortgage:

I honestly don’t want to end up […] getting married anytime soon because when I wanna be with my partner, I wanna be able to help him with, if we end up having a house or renting or whatever, not having to think about my mum and her mortgage and what’s gonna happen to her.

The effects of housing precarity may also flow on to future generations. Millennials and members of Gen Z are having fewer children than their predecessors, in part because of housing costs.

As a non-binary person in their mid-20s told us:

The biggest negative impact of being stuck on the lowest end of the rental market is that it severely limits my ability to plan to start a family. My partner and I both want a child but are terrified of the idea of not being able to afford rent with a new baby and limited family support.

Read more: Australian parents are helping their kids buy a first home with less money, but more rent-free living

Solutions rely on looking at the whole picture

There’s no doubt younger generations are missing out on housing advantages that were more widely available to their parents’ and grandparents’ generations, and for many, this is taking a toll on their wellbeing.

But to inform improved housing policy and innovation, we should consider the housing challenges of one generation in relation to those of other generations. Ideally, this will mean policy interventions can address different generations’ challenges pertaining to housing at the same time.

When housing models innovate to include intergenerational components, wellbeing effects can be magnified. Community-led housing models, such as co-housing, housing co-operatives and collaborative forms of home ownership, are gaining momentum in Australia. These have been linked to wellbeing benefits across different life stages.

A large national study exploring the benefits of living in rental housing co-operatives in the community housing sector is a case in point. Findings show residents across different ages and life stages identify the intergenerational care, friendship, exchange, and support of mixed-generation housing as a core aspect that makes their housing a home.

Purpose-built environments, for example where aged care accommodation is co-located with childcare, enabling regular interactions between different generations, have also shown benefits across age groups. Intergenerationally focused urban planning and housing design has the potential to reduce isolation and loneliness among older generations, and increase support and connectivity for children and young people.

But we also need adaptation, to tweak policies and housing stock we already have. This could mean, for example, adjusting policies to make share housing a better option at any life stage, or adapting dwellings for multigenerational living.

This article is part of a series, Healthy Homes.