Rental affordability has plunged in the past year to reach decade lows in several areas across the country, according to the ninth annual National Shelter-SGS Economics and Planning Rental Affordability Index.
Affordability has worsened in every city except Hobart and Canberra and has deteriorated rapidly in Sydney (by 13 per cent), Melbourne and Perth (both by 10 per cent). Only Melbourne and the ACT have what are considered acceptable rents for average income households.
Affordability in the regions has also declined everywhere except Tasmania with falls of between seven and nine per cent in regional QLD, regional SA, and regional WA.
National Shelter CEO Emma Greenhalgh said: “Rental affordability in Australia is going from bad to worse.
“In the past year renters have been smashed with enormous rent hikes well beyond income growth.
“With vacancy rates so incredibly low, landlords have been able to pass on interest rate rises to tenants - and the pressure is only set to increase following last week’s rate rise.
“More households in our cities and our regions are in rental stress and many areas are the most unaffordable they have ever been.
“Governments must urgently address this worsening affordability crisis, including by building more homes and better regulating renting.”
The situation is particularly dire for people on low incomes, with a single person on JobSeeker having to spend more than 75 per cent of their income to rent a one bedroom apartment in any capital city.
Even the regions are severely unaffordable with rents in regional SA - comparatively the most affordable area - still requiring 53 per cent of a JobSeeker’s income.
A single pensioner would need to spend 50 per cent of their income to rent in all capitals except Adelaide and Hobart and at least 32 per cent in regional areas.
Greater Brisbane, regional QLD, regional VIC and regional NSW posted their lowest affordability levels since 2012, with average households needing to spend between 27 and 30 per cent of their income for a median property in those areas.
Greater Sydney is now level with Greater Hobart as the least affordable capital city with a median rental at $650 a week costing 29 per cent of the average renting household’s income.
Greater Brisbane ranks third among the cities with its lowest ever affordability rating and median rentals at $553 a week costing 28 per cent of average income.
Regional QLD is now the least affordable place of all regions and capital cities with median rentals at $553 costing 30 per cent of average income, a figure which meets the threshold for rental stress.
“Unaffordability has spread from the cities to well into the regions. Households will have to live further away from where the jobs are to access affordable rents, and businesses are struggling to find workers," said Ellen Witte, Principal at SGS Economics & Planning.
“This downward spiral has now reached the point where very few affordable long-term rentals are on offer.
“We need to attack this problem from multiple angles. This means rapidly expanding social and affordable housing, rethinking how we use tax subsidies and strengthening renters’ rights.”
The Index was developed in partnership with the Beyond Bank Australia Foundation. Peter Rutter, Chief Community & Strategy Officer, said: “We believe that everybody has the right to safe, secure and affordable housing, which includes rental accommodation.
“Through the Beyond Bank Australia Foundation, we invest in projects and initiatives that aim to make this a reality. We are proud to again partner in this important work so that we can continue to understand the cost of living pressures that people are facing and think about how we can work together to overcome them.”
Charlie Moore: 0452 606 171