Rising rents are reshaping household budgets, with housing costs now flowing directly into food insecurity. Insights from Cotality and Foodbank Australia highlight how affordability pressures are rapidly impacting everyday essentials.
- Renters now spend ~1/3 of income on housing, a record high
- 1 in 3 households - and around half of renters - face food insecurity
- Housing costs are now a leading driver of financial stress
To mark the start of Cotality Cares 2026, Tim Lawless joined Foodbank Australia CEO, Kylea Tink, for a fireside discussion examining the link between housing affordability and food insecurity.
The conversation brought together macro housing trends and frontline insights to highlight how cost-of-living pressures are reshaping household budgets across Australia.
Rental affordability remains stretched
Rental markets remain characterised by tight supply and elevated costs.
Rents have risen sharply in recent years, materially outpacing income growth, while vacancy rates remain well below pre-pandemic norms.
As a result, affordability has deteriorated significantly. The typical renter is now dedicating around one-third of their pre-tax income to rental payments - the highest level on record.
Structural drivers continue to underpin these conditions, including:
- Persistently low vacancy rates
- Strong population growth and migration rebound
- Insufficient new housing supply
- Smaller household sizes increasing demand
While growth in rents is beginning to moderate, this is largely due to affordability ceilings, rather than a meaningful improvement in supply-demand balance.
Households reaching financial limits
With rental costs consuming a growing share of income, many households are adjusting behaviour to manage affordability pressures.
This includes:
- Increasing household density (shared and multi-generational living)
- Delayed household formation among younger cohorts
- Shifting demand toward more affordable markets
These trends point to a rental sector where financial buffers are limited, and households are increasingly constrained in their ability to absorb further cost increases.
Food insecurity as a downstream effect
Foodbank’s data provides a complementary perspective, showing how housing pressures are flowing through to everyday consumption.
Nationally, one in three households are now experiencing food insecurity, with rates increasing rapidly in recent months.
Among renters, the impact is more severe:
- Approximately one in two renting households report food insecurity
- Many are in the severe category, meaning meals are skipped or reduced
Importantly, this is not isolated to traditionally vulnerable groups. Food insecurity is increasingly affecting working households, families and younger Australians, particularly Gen Z.
A clear hierarchy of spending
The discussion reinforced a consistent pattern in how households prioritise spending under pressure.
Housing costs remain the primary obligation, followed by utilities and essential services. As a result, food expenditure becomes the most flexible category, and often the first to be reduced.
This can lead to:
- Substitution toward lower-cost, lower-quality food
- Reduced consumption of fresh produce
- Skipped meals in more severe cases
Foodbank data suggests that once households enter food insecurity, it can become persistent rather than temporary, especially in a high-cost environment.
Rapid transmission of economic stress
A notable insight from the discussion is the speed at which cost pressures flow through to households.
Changes such as rent increases or interest rate rises can translate into increased demand for food relief within one to two weeks, reflecting how finely balanced many household budgets have become.
A structural challenge in the making
For the first time, housing costs have emerged as a leading driver of food insecurity, signalling a shift in the underlying causes of financial stress.
With rental markets remaining tight and supply constraints ongoing, the intersection between housing affordability and food security is likely to remain a key issue.
From insight to action
As highlighted through this discussion, addressing these challenges requires both data-driven insight and collective action.
Partnerships with organisations like Foodbank, combined with deeper visibility into housing trends, play an important role in understanding and responding to the evolving needs of Australian households.
Learn more about Foodbank Australia’s work and how to support them here: https://www.foodbank.org.au/
