Homeowners’ Spare Rooms Worth $700 A Month In Today’s Rental Crisis
Rising mortgage costs and the rental housing shortage have combined to create strong demand for spare room accommodation
3 min
Thousands of Australian homeowners are renting out spare rooms amid the rising cost of living, anaemic wages growth and a national shortage of rental homes. A survey by consumer company Finder shows 9% of respondents – extrapolated to more than 600,000 householders — are renting out their spare rooms. They’re making an average of $667 per month or $167 per week by renting out the spare room.
According to the Australian Bureau of Statistics, 77% of households have at least one spare bedroom that they could rent out during today’s rental housing crisis. CoreLogic estimates there is currently a rental housing shortfall of 47,500 homes, making it difficult for many Australians to find a rental home amid weekly rents increase by 30% over the past three years as a result. Meanwhile, homeowners are grappling with large increases in loan repayments due to rapid-fire interest rate rises. The combination of these two problems is creating a strong market for spare-room renting, with apps such as flatmates.com.au and AirBnb facilitating connections.
Finder’s money expert Richard Whitten said: “For many Aussies, living with a roommate is better than the consequences of missed repayments. It’s also a good opportunity to create an extra revenue stream. You could be missing out on thousands of dollars by not making use of your extra room. If you do decide to go ahead with it, you’ll need landlord insurance to be covered. Home insurance doesn’t typically cover damage caused by tenants.”
The number of householders living in larger homes than they require is a structural problem in the Australian housing market that was raised by former Reserve Bank Governor Philip Lowe at a Senate hearing in May.
During the pandemic, many householders switched from smaller forms of accommodation in inner city areas, such as apartments, to larger suburban houses on the city outskirts or in the regions because they were allowed to work from home. The number of people renting share housing also fell as people sought their own space to make working from home more comfortable and to cope with long periods of lockdown.
Now, Dr Lowe says rising interest rates and rents will force people to “economise on housing”. “The way that this ends up fixing itself, unfortunately, is through higher housing prices and higher rents,” Dr Lowe 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. That’s the price mechanism at work. We need more people on average to live in each dwelling, and prices do that,” he said.
Dr Lowe said strong population growth would exacerbate the housing shortage, and rents would continue to rise. This means demand for accommodation, including spare rooms, is likely to remain high. “We’re going to have 2 percent more people in the country this year, [but] the capital stock is not increasing by 2 percent,” he said.
Rents have risen by 10% in capital cities and 4.1% in the regions over the past 12 months.
Renting it out is the latest method used by homeowners to derive an income from their homes. An explosion in short-stay accommodation apps over the past decade has also seen many homeowners renting separate living quarters or studios at their homes to short-term holidaymakers or travelling executives. In addition, the Finder survey found that 5% of the population – or more than 300,000 people – are renting out a garage. Australian websites such as Parkhouse, Parking Made Easy and Space Out are enabling homeowners to rent parking spaces including their own driveways.
The Finder survey asked respondents about their side hustles to earn extra income amid today’s cost of living crisis brought about by the highest rate of inflation in three decades and rising interest rates. The survey found that 35% of Australians — or 7.1 million people – are earning additional income through a side hustle. ABS data shows a record number of Australians now have a second job. Popular side hustle jobs include dog walking, mystery shopping, tutoring, freelancing and ride-sharing. The favoured non-employed side hustles include recycling cans and bottles, earning an average of $46 a month, making and selling goods ($213 per month) and selling pre-owned goods ($897 per month).
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The marketplace has spoken and, at least for now, it’s showing preference for hybrids and plug-in hybrids (PHEVs) over battery electrics. That makes Toyota’s foot dragging on EVs (and full speed ahead on hybrids) look fairly wise, though the timeline along a bumpy road still gets us to full electrification by 2035.
Italian supercar producer Lamborghini, in business since 1963, is also proceeding, incrementally, toward battery power. In an interview, Federico Foschini , Lamborghini’s chief global marketing and sales officer, talked about the new Urus SE plug-in hybrid the company showed at its lounge in New York on Monday.
Lamborghini
The Urus SE SUV will sell for US$258,000 in the U.S. (the company’s biggest market) when it goes on sale internationally in the first quarter of 2025, Foschini says.
“We’re using the contribution from the electric motor and battery to not only lower emissions but also to boost performance,” he says. “Next year, all three of our models [the others are the Revuelto, a PHEV from launch, and the continuation of the Huracán] will be available as PHEVs.”
The Euro-spec Urus SE will have a stated 37 miles of electric-only range, thanks to a 192-horsepower electric motor and a 25.9-kilowatt-hour battery, but that distance will probably be less in stricter U.S. federal testing. In electric mode, the SE can reach 81 miles per hour. With the 4-litre 620-horsepower twin-turbo V8 engine engaged, the picture is quite different. With 789 horsepower and 701 pound-feet of torque on tap, the SE—as big as it is—can reach 62 mph in 3.4 seconds and attain 193 mph. It’s marginally faster than the Urus S, but also slightly under the cutting-edge Urus Performante model. Lamborghini says the SE reduces emissions by 80% compared to a standard Urus.
Lamborghini’s Urus plans are a little complicated. The company’s order books are full through 2025, but after that it plans to ditch the S and Performante models and produce only the SE. That’s only for a year, however, because the all-electric Urus should arrive by 2029.
Lamborghini
Thanks to the electric motor, the Urus SE offers all-wheel drive. The motor is situated inside the eight-speed automatic transmission, and it acts as a booster for the V8 but it can also drive the wheels on its own. The electric torque-vectoring system distributes power to the wheels that need it for improved cornering. The Urus SE has six driving modes, with variations that give a total of 11 performance options. There are carbon ceramic brakes front and rear.
To distinguish it, the Urus SE gets a new “floating” hood design and a new grille, headlights with matrix LED technology and a new lighting signature, and a redesigned bumper. There are more than 100 bodywork styling options, and 47 interior color combinations, with four embroidery types. The rear liftgate has also been restyled, with lights that connect the tail light clusters. The rear diffuser was redesigned to give 35% more downforce (compared to the Urus S) and keep the car on the road.
The Urus represents about 60% of U.S. Lamborghini sales, Foschini says, and in the early years 80% of buyers were new to the brand. Now it’s down to 70%because, as Foschini says, some happy Urus owners have upgraded to the Performante model. Lamborghini sold 3,000 cars last year in the U.S., where it has 44 dealers. Global sales were 10,112, the first time the marque went into five figures.
The average Urus buyer is 45 years old, though it’s 10 years younger in China and 10 years older in Japan. Only 10% are women, though that percentage is increasing.
“The customer base is widening, thanks to the broad appeal of the Urus—it’s a very usable car,” Foschini says. “The new buyers are successful in business, appreciate the technology, the performance, the unconventional design, and the fun-to-drive nature of the Urus.”
Maserati has two SUVs in its lineup, the Levante and the smaller Grecale. But Foschini says Lamborghini has no such plans. “A smaller SUV is not consistent with the positioning of our brand,” he says. “It’s not what we need in our portfolio now.”
It’s unclear exactly when Lamborghini will become an all-battery-electric brand. Foschini says that the Italian automaker is working with Volkswagen Group partner Porsche on e-fuel, synthetic and renewably made gasoline that could presumably extend the brand’s internal-combustion identity. But now, e-fuel is very expensive to make as it relies on wind power and captured carbon dioxide.
During Monterey Car Week in 2023, Lamborghini showed the Lanzador , a 2+2 electric concept car with high ground clearance that is headed for production. “This is the right electric vehicle for us,” Foschini says. “And the production version will look better than the concept.” The Lanzador, Lamborghini’s fourth model, should arrive in 2028.
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