Cost-of-living pressures turning parents into landlords in their own homes

In the middle of the cost-of-living crisis, tension is rising within households across Australia as more parents ask their adult children still at home to pay rent.

The free ride, it seems, is over. But the new normal comes loaded with tricky implications.

Why are parents charging rent?

For many families, the financial squeeze is real.

Housing costs, utilities, and household bills have all increased, resulting in more adult children staying longer at the dinner table and in spare bedrooms, making the phrase “If you’re here, you contribute” a more common refrain.

“We’re seeing more young people staying in the family home for longer, the nest just doesn’t empty out as quickly as it used to,” Dr Michael Fotheringham from Australian Housing and Urban Research Institute (AHURI) said.

“That’s a reflection of the costs of housing and the challenge for young people in securing a stable income or building their savings.”

For the adult child, that might mean paying a percentage of the mortgage or an agreed-upon weekly figure.

For the parents and the adult children in the household, it’s a way to reconcile rising costs with a desire to keep the relationship civil rather than confrontational.

At the same time, the broader housing reality bites. Research from AHURI found that for early-career adults aged 25-34, family support is now “the single biggest factor” in being able to buy a home.

Meanwhile, in a survey conducted by Monash University, 70 per cent of those aged 18-24 flagged affordable housing as their top concern. With home ownership slipping further out of reach, parents may feel pressed to extract “rent” as a stopgap rather than a luxury.

But Dr Fotheringham said the idea of a widespread trend toward charging full rent is overstated.

“I haven’t seen strong evidence of parents charging market-level rent,” he said.

“In fact, many families don’t charge at all, or they charge a discounted amount, sometimes even putting that money aside to help their kids with a deposit later.”

A survey conducted by Compare the Market showed that more than 1,000 Australians found that adults believe $153.39 per week is a fair amount for grown children to pay when they move back home. The report noted that a flat fee of roughly $150 a week is still “a very competitive deal”, given it usually includes food, electricity, water and internet.

At that rate, a single adult child would contribute around $7,800 a year, and families with two adult children living at home could be looking at over $15,000 annually in board.

Dr Marny Lishman, a psychologist and mindset coach, told The Nightly that when the adults of the household ask young adults to contribute financially, it’s often for two reasons.

“A lot of people are going to be asking their adult children for contributions… probably for financial reasons,” she said.

“But psychologically, if adult children lived anywhere else — with friends, in a share house, renting or with a mortgage — they’d be paying anyway. So it’s actually a good thing for parents to ask their adult children to contribute to household bills.”

Boundaries and balance: When home isn’t free

Charging adult kids rent raises deeper questions than just the dollar figure.

When does contribution become control? Does paying rent give adult children more rights, and more expectation to stay? Or conversely, does it erode the idea of home as a safe haven?

For many parents, having a rent arrangement is about clarity, rather than cash extraction.

“Often what’s happening isn’t rent in the true sense,” Dr Fotheringham said.

“It’s more about contributing to utilities or groceries; you’re avoiding the full rent cost, but still sharing some household expenses. It’s usually a discounted arrangement rather than a commercial one.”

Dr Lishman said contributing does shift the dynamic at home — but for good reason.

“It probably does change the dynamic, but it’s kind of necessary, don’t you think?” she said.

“Once kids hit those teenage years, parents are preparing them to launch into adulthood, it’s going to feel a little strange still living under your parents’ roof but having to contribute. But it’s for your own good.”

In this dynamic, the invisible rules matter: who pays what, what that payment covers (mortgage, bills, food, cleaning), how long the arrangement lasts, and whether it’s tied to expectations like saving for a deposit.

Without clarity, resentment can set in on both sides, parents may feel taken advantage of, and children may feel undervalued.

“For families who do charge, the motivations vary,” Dr Fotheringham said.

“Those paying off a mortgage might need the contribution, while those who own their home outright are often focused on teaching responsibility. It really depends on the parents’ circumstances.”

Dr Lishman said parents shouldn’t feel guilty about setting expectations.

“The dynamics are going to shift, and you might be met with resistance or discomfort,” she said.

“But it’s short-term pain for long-term gain. You’re preparing them for a world where they’ll have to contribute a lot more financially than they are under your roof.”

She added that the healthiest approach is transparency.

“Be as open and honest as possible,” she said. “Let your kids know how you feel, why you feel like that, and what you need from them. Lay down the rules kindly and just communicate openly about what you actually require.”

Lesson in money and independence

If charging rent at home is becoming part of the new normal, then how might it be done well?

One approach is transparency: set a figure that reflects actual costs (utilities, space, food, and contribution) rather than market rent.

Another is fairness: consider alternatives such as covering groceries, doing household chores or contributing to bills, especially if the adult child is studying or starting out in the workforce.

Dr Fotheringham noted that the “right time” to start contributing usually depends on life stage rather than age.

“Finishing education and moving into the workforce is often a natural trigger,” he said.

“That’s when parents might say, ‘Okay, now it’s time to start contributing to the household or putting money aside for your future home.’”

Finally, framing the rent as a transition tool, not a permanent fixture, can keep the relationship healthy.

Dr Lishman said even small contributions can build strong financial habits.

“Even with little kids, we get them to contribute to chores,” she said.

“As they get into their teen years, sometimes we ask them to contribute a little bit… it’s about teaching healthy financial habits so when they’re out in the world, they can actually do it.”

“Even twenty bucks — you’re still learning if you have to hand over twenty bucks,” she said.

“The more you do, the more you’re inoculating them for future adult living, which is quite a shock otherwise.”

As the housing squeeze tightens, home-economy arrangements like charging rent may become more and more common, but they only work if they are fair, communicated clearly and designed to empower rather than entrap.

“Multigenerational living is becoming more common,” Dr Fotheringham added.

“In many cultures, it’s the norm, and increasingly, in Australia, families are making the same decision for economic reasons. It’s a practical way to manage costs and support each other across generations.”

Dr Lishman said the economic pressures mean this shift will become even more common.

“Adults are likely to be living with their parents a lot longer than they used to,” she said. “It’s tough out there economically.”