A Productivity Commission report shows more than two in five rent assistance recipients remain in rental stress amid a national housing crisis that is “smashing” Australians, while Housing Australia has approved 12 project contracts under the federal governments flagship social and affordable housing initiatives that will deliver more than 800 homes.
The new report showed nearly 42% of low-income households that received Commonwealth Rent Assistance (CRA) were still paying more than 30% of their income on rent in 2023/24.
Renters have been battered in recent years, putting housing at centre stage in the lead-up to the upcoming federal election. Since the onset of COVID, rents have surged by 36.1% nationally, equivalent to a rise of $171 per week, or $8,884 per year at the median level. Vacancy rates in the rental market remain crushingly low as the result of a severe housing undersupply.
The federal government’s National Housing Accord aims to deliver 1.2 million “well-located” homes over five years in a bid to pump supply into the market, running concurrently with the Housing Australia Future Fund and National Housing Accord Facility target of delivering 40,000 social and affordable homes.
Everybody’s Home spokesperson Maiy Azize said that the Productivity Commission report figures highlight the urgent need to reform CRA, and increase the rate of Centrelink payments, to better support renters doing it tough.
“The fact that more than two in five people who receive rent assistance are still in rental stress highlights the extreme cost of rents and the low rate of JobSeeker,” Azize said.
“For those who can get it, Commonwealth Rent Assistance can take the edge off rents. But the payment is unfairly designed – the people who need the most help get the least benefit, and many people aren’t eligible for any help at all.
“The federal government must raise the rate of Centrelink payments like JobSeeker, and fix the problems with Commonwealth Rent Assistance. This would give a badly needed reprieve to the renters doing it the toughest.
“The housing crisis is still smashing so many Australians. It’s time for the federal government to deliver meaningful solutions,” Azize said.
Mission Australia similarly called for the federal government to raise the maximum threshold for CRA by 60% and review rental subsidies, and increasing JobSeeker and other income support payments to at least $82 a day.
The number of households on social housing waiting lists is 223,959, including 109,462 in greatest need on the priority waitlist, marking a 3% increase.
More than 50,000 Australians needing crisis or longer-term accommodation were unable to receive that help from homelessness services because of the housing emergency, the report showed. Specialist homelessness services were provided to 280,100 people in 2023/24, according to the Australian Institute of Health and Welfare.
On Census night in 2021, around 48.2 Australians per 10,000 people in the population were homeless. Homelessness is climbing the income ladder as housing affordability reaches its worst levels on record.
Mission Australia CEO Sharon Callister said Productivity Commission report “confirms what we’ve been warning: rising rental stress, a dysfunctional housing system, and the ongoing cost-of-living crisis are driving more people across Australia into homelessness, including those in paid work, with many being pushed into homelessness for the first time.
“The staggering lack of affordable housing options is overwhelming the system, leaving more people without a safe, secure place to call home,” she said.
The organisation said it saw a 26% increase in demand for its housing and homelessness services in the past three years. It also called on the federal government to deliver a national housing and homelessness plan, and a $500 million Homelessness Prevention Transformation Fund to help people before they reach crisis point, and a commitment to building one million new social and affordable homes over the next 20 years.
Meanwhile, partnerships between Housing Australia and the community housing sector will enable projects with contracts awarded to access funding under Funding Round One for the Housing Australia Future Fund Facility (HAFFF) and National Housing Accord Facility (NHAF) to deliver more than 240 social and 570 affordable homes, with majority of homes complete or currently under construction.
Housing Australia announced an initial pipeline of preferred projects under Funding Round One in September to potentially deliver more than 13,000 social and affordable homes across Australia, which would achieve one-third of the program’s five-year target of 40,000 social and affordable homes.
Preferred applicants from Round One have until the end of June to enter into funding agreements.
Most of the homes in Round One are in Melbourne – including 307 dwellings in Ivanhoe, 272 in Kensington, and 97 in Noble Park.
The Productivity Commission’s latest Report on Government Services revealed just 2.9% of Victorian households are in social housing – well behind the national average of 3.9%.
The call for applications for Funding Round Two closed on Friday.
Housing Australia said it plans to activate up to 5,000 social dwellings in partnership with state and territory governments as soon as possible. Further market-based rounds are expected from mid-year.
“These initial projects demonstrate the impact of partnering to bring capital and capability together to improve housing outcomes,” said Housing Australia CEO, Scott Langford.
PowerHousing Australia CEO Michelle Gegenhuber said the announcement is a significant milestone in the commencement of increasing social and affordable housing supply “for those who can’t access a home and underscores the importance of long-term partnerships between community housing providers, government, and institutional investors.
“This is an important first step in delivering the much-needed social and affordable housing that communities across Australia are calling for,” she said.
