Rental affordability across regional Victoria is continuing to rapidly decline, hitting a historic low in 2024 with low income earners bearing the brunt of the crisis, according to the tenth annual National Shelter-SGS Economics and Planning Rental Affordability Index released today.
The average rental household in regional Victoria is now paying 28 per cent of the gross income of $84,203 if renting at the median rate. Renting in the region is now classed as ‘moderately unaffordable, with a score of 108.
People on low incomes are suffering the most, with a single person on JobSeeker facing ‘extremely unaffordable’ rents, with 59 per cent of their income going towards a rental. Another group that is struggling is single part-time workers on parent benefits with ‘severely unaffordable rents’, and sacrificing 46 per cent of their pay. Meanwhile, single or coupled pensioners are facing ‘unaffordable’ rents in regional Victoria.
Tenants Victoria CEO Jennifer Beveridge said: “Renters tell Tenants Victoria’s frontline services that housing affordability remains a huge concern and continue to report steep rent hikes to us. Indeed, our services can’t meet the heavy demand from renters on low to middle incomes who seek our help.
“Victoria’s rental laws there is no fixed method to calculate a rent rise, so we have long called for the State Government to introduce a fairness formula to guide the setting of fair rent increases.”
The trend of declining affordability is consistent across all parts of regional Victoria but at different levels. While the Surf Coast and Geelong regions experienced some of the largest decreases in affordability between 2020 and 2021, Ocean Grove and Torquay are now considered ‘Severely Unaffordable’ to the average regional Victorian household. Coastal towns are among the least affordable regions in the state.
Rental affordability in regional cities such as Bendigo, Shepparton and Ballarat have continued to decline and are now considered ‘Moderately Unaffordable’ for the average household.
SGS Economics & Planning Principal Ellen Witte said: “The rental market in Victoria is spiraling and what was once affordable is slipping out of reach for many. Households are being forced to live further away from their jobs to access affordable rents, causing fatigue and other issues in workers.”
“This is a severe problem which needs to be addressed by the government with an expansion in social and affordable housing, before we have more people on the streets. Both state and federal governments need to provide urgent intervention.
“After reaching a peak during the Covid-19 pandemic, most regional areas in Victoria have seen a decline in affordability and people on low incomes are suffering the most. Families and pensioners are in dire straits.
“We need urgent rental market reform to ensure residents across the state have access to safe and affordable housing and remain in areas with access to essential services such as schools, hospitals and emergency services.”
|
Household |
Affordability |
Rent as share of income |
RAI score |
|
Single person on JobSeeker |
Extremely unaffordable |
59 per cent |
51 |
|
Single pensioner |
Unaffordable |
37 per cent |
81 |
|
Pensioner couple |
Unaffordable |
31 per cent |
98 |
|
Single part-time worker on parent benefits |
Severely unaffordable |
46 per cent |
65 |
|
Single full-time working parent |
Affordable |
19 per cent |
157 |
|
Single income couple with children |
Acceptable |
23 per cent |
129 |
|
Dual income couple with children |
Very affordable |
12 per cent |
258 |
|
Student share house (three bedroom) |
Acceptable |
24 per cent |
127 |
|
Minimum wage couple |
Acceptable |
20 per cent |
149 |
|
Hospitality worker |
Acceptable |
25 per cent |
122 |
* Table comparing each household in regional Victoria and their rent as a share of income, as well as RAI score and affordability.
EDITOR’S NOTE: The rental affordability index scores areas based on median rental prices and average income of rental households within the capital city or rest of state area’. A score of 100 indicates households spend 30 per cent of income on rent, the critical threshold level for housing stress. A lower score is worse.
A score of 40 or less indicates critically unaffordable rents, 41-60 indicates extremely unaffordable rents, 61-80 indicates severely unaffordable rents, 81-100 indicates unaffordable rents, 101-120 indicates moderately unaffordable rents, 121-150 indicates acceptable rents, 150-200 indicates affordable rents and more than 200 indicates very affordable rents.
Contact details:
Lauren Ferri 0422 581 506