AUSTRALIA’S rental affordability crisis needs urgent intervention, with the crisis being felt right across the country as rents rise faster than income and housing stress and homelessness escalate.
According to the latest release of the Rental Affordability Index (RAI) by SGS Economics & Planning, Australian renters are facing an unsustainable market, as every capital saw a decline in affordability over 2022.
With wages failing to keep up with inflationary pressures – including housing – at a time where vacancy is at a record low and interstate migration and global supply chain issues are pushing up rents, renters are running out of affordable options.
“Rental increases mean individuals and families are forced to move away from family and friends driving disconnection at the same time they are struggling to find money to pay for essentials like food, utilities, and healthcare. Key workers, including nurses and teachers often can’t afford to live in the communities they serve,” said Emma Greenhalgh, CEO at National Shelter.
The RAI categorises rental stress as being felt by anyone—whether individuals, couples or families—pay 30% of their income or more on rent.
“We found that the static or slightly falling rents of the early pandemic were short-lived, with rents now being equal or higher than pre-pandemic, and Hobart still the least affordable city,” said Ellen Witte, lead author of the report and partner at SGS Economics and Planning.
“The pandemic also saw the existing rental crisis spread to the regions, when many households left capital cities. More and more regional households are struggling to pay their rent and key workers are unable to access housing, especially in the regional areas of Queensland, Tasmania, NSW and Western Australia.”
Witte also noted that the severe flooding also had a significant impact on affordability, particularly in the Northern Rivers of NSW.
With Lismore and Bellingen amongst the worst affected towns, as affordability dropped by 10% and 14% respectively over the year.
“Low-income renters need more active intervention. We need rental reform that includes limiting rent increases and adjustments to income support including Commonwealth Rent Assistance. We also need greater investment in social and affordable housing to reverse a decade-long decline,” said Witte.
As for capital cities, Greater Hobart remained the least affordable in Australia, having held the position since 2019.
While Greater Brisbane hit a new historic low point for affordability over the last 12 months, with an 11% decline in its RAI score, the largest of any capital.
Greater Perth has seen a 15% decline over the last two years, reaching its lowest rental affordability since 2016 after a 6% drop this year.
The remaining capitals all followed suit, reporting declines in affordability over the last 12 month after improvements during the peaks of the pandemic.
Over the last 12 months, both Greater Sydney and Melbourne have seen an 8% decline, with Greater Adelaide down 6% and the ACT down 9%.
This declining affordability is unsurprisingly having far reaching impacts and is already affecting the viability of essential public services across the country’s cities.
“Key workers in fields such as education and healthcare find it difficult to rent in communities they serve, so to ensure longevity of vital services, there needs to be improved access to affordable housing for staff and policies in place such as caps to rent increases,” said Shelley Mallett, director at the Brotherhood of St. Laurence’s Research and Policy Centre.
Greenhalgh did welcome plans like the Housing Australia Future Fund, the National Housing Accord and the development of a National Homelessness Plan, but stressed that enough wasn’t being done to support the health and wellbeing of communities and low-income earners.
