Rental affordability has plunged to record lows in almost every capital city and region, with low income renters bearing the harshest brunt of the crisis, according to the tenth annual ³Ô¹ÏÍøÕ¾ Shelter-SGS Economics and Planning Rental Affordability Index released today.
The Index highlights an increasingly dire situation. For single JobSeekers and part-time workers receiving a parenting payment, every city and rest of state area is now classed as severely unaffordable or worse. There is also nowhere affordable for pensioners and only regional South Australia is affordable for a single hospitality worker.
Sydney, Melbourne, Brisbane, Perth and Adelaide all recorded their worst affordability scores since the index began in 2014. The rest of NSW, VIC, QLD and SA also hit record lows. Rental affordability improved slightly in the ACT and Tasmania.
³Ô¹ÏÍøÕ¾ Shelter spokesperson John Engeler said: “Renters across the entire country are under severe pressure as rent rises continue to outpace income growth amid historically low vacancy rates.
“The situation is especially serious for low-income renters who are increasingly forced to rent privately due to the declining availability of social and affordable housing.
“A single pensioner would have to spend 86 per cent of their income to rent a median one-bedroom apartment in Sydney. This is clearly unacceptable. Governments must urgently act to reverse this affordability crisis including by building more social and affordable homes and better regulating rental markets.”
In the past 12 months, rental affordability has declined 13 per cent in Perth, eight per cent in Adelaide, six per cent in Melbourne, five per cent in Sydney, and four per cent in Brisbane.
Perth is now the least affordable capital city, with median weekly rent of $629 taking up 31 per cent of median income, closely followed by Sydney where median rent of $720 is 30 per cent of median income, meeting the threshold for rental stress.
Ellen Witte Principal at SGS Economics & Planning said: “Deteriorating affordability across the country has been driven by a number of factors, including increasing material costs, the increased cost of construction, rising interest rates, a return to pre-pandemic rates of population growth, and strong rent price increases.
“Not only are rent rises hurting households, they are also exacerbating inflation. The ACT introduced rent increase limits in 2019, and rental affordability has improved there since. This suggests that guide rails that prevent excessive rent increases could serve a dual purpose of improving rental affordability and lowering inflation.
“Huge swathes of Australia are now unaffordable to even median income renters. With rental affordability deteriorating this rapidly, rents are now “critically unaffordable” for pensioners, JobSeekers and some single parents. We added the “critically unaffordable” category this year to highlight households that would now have to pay 75% of their income or more on rent.”
The Index was developed in partnership with the Beyond Bank Australia Foundation. Peter Rutter, Chief Community & Strategy Officer, said: “We believe 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.”
