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Primary school teacher Matthew Bain reached breaking point when he entered his fourth week living out of a suitcase in a youth hostel.
Paying $450 a week to share a dormitory and one bathroom between 10 people, while working full-time, was not something 25-year-old Bain, who arrived from England in January, had pictured for his new life in Melbourne.
Primary school teacher Matthew Bain, 25, was stuck in a youth hostel before finding a room in a Glen Waverley share house.Credit: Penny Stephens
“I needed to be able to hang up a shirt and put shoes in a cupboard. It was difficult to feel like I was living and not just squatting,” he said.
Bain spent three months searching for a rental home, initially while staying on a friend’s couch before moving into a CBD hostel. But despite sending daily tenancy applications and attending countless inspections, he was getting nowhere.
Hostel managers say would-be renters are increasingly getting stuck paying to live in the city’s backpacker accommodation, sometimes for six months at a time, as they find themselves unable to find a home in Melbourne’s rental crisis.
Many of those affected are working holiday visa-holders and international students, who, without a local rental and employment history, are cast aside in a highly competitive market.
They say it’s giving youth hostels a troubling new role. On the one hand, it’s a relief that people are finding accommodation. On the other, it’s a damning sign of how grim Melbourne’s rental crisis has become.
Melbourne’s rental vacancy rate has plunged to 0.8 per cent, making the market tighter than Sydney’s.
When Bain was facing a doubling in costs to keep his hostel bed ahead of the Formula 1 Australian Grand Prix, he shared a Facebook post in desperation in a renting group: “This is criminal. This crisis is awful, I’m going to fall apart if something doesn’t come along soon.”
The post was widely shared and he landed a spot in a Glen Waverley five-person share house for $450 a month. It was a stroke of luck, he said, having met others who were in the same position at the backpackers.
Matthew Bain says finding his share-house was a stroke of luck. Credit: Penny Stephens
“I could have easily been stuck looking for God knows how long,” he said.
“It baffled me. I ended up feeling a little bit forgotten as someone who moved abroad to work here.
“I would never slate hostels for what they are. It’s just a shame that the reality of the situation is that people need to end up staying there long term.”
Sofie Basile, who owns hairdresser Unico Hair in Fitzroy, has had two employees this year with no choice but to live in youth hostels.
She said the situation meant some overseas arrivals – who tend to fill important staffing gaps in hospitality and other sectors of the service industry – were leaving Melbourne sooner than they planned. One young Italian hairdresser cut short her time in Melbourne after spending two months paying $365 per week to sleep in an eight-person dorm room in Brunswick.
“It’s going to affect a lot of businesses because you won’t be able to keep people long term even if they want to stay,” Basile said.
Arda Ildiz, a 25-year-old IT student from Turkey, said living in youth hostels had been “the worst experience of my life”. He has since secured an Alphington share-house for a fraction of the cost.
“I know too many people who went back to Turkey and other countries because of this problem. It affects you [mentally] – you are new here, you are far from your country, and you cannot find a place to live. It’s terrible,” Ildiz said.
Melbourne City Backpackers manager Jess Porter said while there was always a cohort who chose to stay in hostels long-term, there had “absolutely” been a rise in people staying three to six months because of the rental shortage.
Porter said the hostel was charging two-thirds more than what it was a year ago.
“Even with that increase, we’re seeing people look at their options here,” he said.
“If you’ve got a backpacker going to an open house with no localised rental references or permanent visa, they’re usually not going to get the property … which sucks. It’s hard for everyone at the moment.”
Evan Mahony, who owns three Melbourne backpackers, said his dorms were full despite the higher fees, partly driven by people staying long term because share houses were increasingly rare and expensive.
“Even many of my staff can’t get anywhere to live,” he said.
Compounding the issue is that there are about 2500 fewer backpacker beds in Melbourne since the pandemic, according to Alex Hill, president of Adventure Tourism Victoria, the peak body for youth hostels. Today, the city has about 3000 in total.
“We have a lot of people coming into the country and we don’t have a lot of rentals at all, so it’s very tight,” Hill said.
He said the rental pains were changing the behaviour of international visitors.
“They might have spent six months in Melbourne but when they’ve stayed in a hostel for two months, they’ll try a different part of Australia. Some people are leaving the country.”
Tenants Victoria community engagement director Farah Farouque said young people being forced to lean on youth hostels was a symptom of the intense pressure of Melbourne’s tight rental vacancy rates. She added that there were fewer share houses since COVID-19.
“It’s another reflection of parlous state of the rental market.”
Another concern, Farouque said, was that people resorting to extended stays in youth hostels didn’t have the protection of the state’s rental laws.
She said more needed to be done to help renters, including introducing rent caps and regulating Airbnbs to make way for more housing.
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