Hobart has overtaken Sydney as the least affordable capital in Australia, according to the latest May Rental Affordability Index.
The RAI found that Hobart had overtaken Sydney and was then followed by Adelaide, Brisbane, Melbourne, Canberra and Perth.
The index is an indicator of rental affordability relative to household incomes released biannually by National Shelter, Community Sector Banking and SGS Economics & Planning.
Hobart was given a rating of 102 in the December quarter, and the data found that the average household in Hobart faced rents at 29 per cent of total income, putting it on the verge of being unaffordable.
Sydney, as the second city, had a rating of 113 in the quarter, performing better than expected due to increased income levels from census data.
The index found that, in general, hospitality workers, pensioners and minimum wage earners are being crippled by rental stress across Australia.
Ellen Witte, partner at SGS Economics & Planning, said the data showed that the rental crisis continues for many Australian families.
“The latest Rental Affordability Index shows the rental crisis continues. Financial stress, overcrowding and insecurity are the everyday reality of working families,” Ms Witte said.
Ms Witte said that there were opportunities to better the rental stress, including investment in affordable housing.
“There are opportunities to further streamline development planning processes, but more importantly to invest in social and affordable housing for workers. The use of instruments like the density bonus and inclusionary zoning needs to be maximised,” the partner said.
Unaffordability for very low-income households is most severe in Sydney and Canberra, where median incomes are well above the national average.
In Melbourne, the rating was 126, which meant that the median household faces rent of 24 per cent, which is considered acceptable. However, unaffordable rents are spreading from the city centre.
Ms Witte said that Australia’s food capital was becoming unaffordable for many of the workers that keep the industry alive.
“Full-time hospitality workers may pay 34 per cent of their income on rent, forcing them into housing stress,” Ms Witte said.
In Brisbane, the rating is 121, with a median household facing rents at 25 per cent, which is the first time they have been considered acceptable since the inception of the RAI in 2012.
The ACT had a rating of 128 and 23 per cent rent, while Perth also saw acceptable levels of rent at 21 per cent and a rating of 145.
Adelaide has had the same score now for six quarters with a rating of 117, which is only slightly worse than Sydney and has made most of the rents deemed to be unaffordable.