Rental affordability has remained steady after rapid declines in many parts of the country as the community sector and businesses call for further action to address Australia’s most pressing economic and social challenge.
The 11th annual National Shelter-SGS Economics and Planning Rental Affordability Index, which compares rents with incomes, found affordability in the past year has improved 1% in Sydney and 4% in Canberra, while remaining steady in Melbourne and Adelaide. Affordability declined 1% in Hobart, 2% in Brisbane and 4% in Perth. Affordability declined by 3% in regional Queensland and regional Tasmania, and by 5% in regional WA.
The Rental Affordability Index now includes Housing All Australians as a key partner, reflecting the critical role of business and public-private partnerships in addressing the nation's housing crisis.
“The rental crisis is persistent but green shoots are showing,” said National Shelter Chair John Engeler.
“The Federal Government has made vital steps towards turning this situation around, including delivering the Housing Australia Future Fund and committing to a Better Deal for Renters at National Cabinet.
“We’re already seeing the delivery of hundreds of homes under the HAFF, with thousands in the pipeline which will take pressure off the private rental market. We must now build on this momentum, including by expanding the construction of build-to-rent housing, to further improve affordability for renters.”
SGS Economics & Planning Principal Ellen Witte said: “We have finally seen affordability stabilise in many urban areas after rapid declines to record low levels since 2021. The stabilisation has been especially visible in the major urban areas where renters are reaching their limit and are unable to pay more.
“Regional Australia on the other hand continues to see unaffordability spread to increasingly remote places. The other exceptions are Perth and regional WA, where rents continue to outpace wage growth boosted on the back of growth in employment.”
Despite many urban areas stabilising, the report found rents remain unaffordable in large swathes of the nation even for full-time staff. A full-time hospitality worker has to spend more than 30% of their income on rent in most capitals and rest-of-state areas.
In the least affordable places - Perth, Sydney, regional Queensland and regional NSW - even average earners are in rental stress with rents taking up more than 30% of income.
Robert Pradolin, Founder & Executive Director of Housing All Australians, which has recently become a partner in the Rental Affordability Index, said the rental crisis was having a major negative impact on Australia’s economy and productivity.
“From cafes and hotels to hospitals and childcare centres, businesses across Australia are struggling to find staff because there’s nowhere affordable for them to live nearby,” he said.
“Housing that people can afford is absolutely critical economic infrastructure and without it our national prosperity and productivity are being held back.
“To address our social and affordable housing shortfall we must build 44,500 homes each year for 20 years. Governments can’t do this on their own and so innovative public-private partnerships will continue to be vital to turning this well-being and productivity crisis around.”
EDITOR’S NOTE: The Rental Affordability Index scores are based on median rental prices and the average income of renting households within a capital city or rest-of-state area. A score of 100 represents the point where the average household spends 30% of its income on rent, the critical threshold for housing stress. Lower scores indicate worse affordability.
Contact details:
Charlie Moore: 0452 606 171