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Australia’s rental affordability crisis’ severity has worsened, with its effects spread right across the country, according to new research.
The latest Rental Affordability Index (RAI) has painted a grim picture of the state of Australia’s affordability crisis, revealing every capital city nationwide is experiencing declining rental affordability.
Basing its findings on the 30 per cent of income rule, whereby whenever individuals, couples, or families pay 30 per cent or more of their income on rent, they are in a situation of rental stress, the report found low-income households were at greater risk — with 42 per cent experiencing rental stress.
It found a disparity between the average portion of income renters spend on housing income (20 per cent) as opposed to owners with a mortgage (15.5 per cent).
Report lead author and SGS Economics and Planning partner Ellen Witte explained that “the static or slightly falling rents of the early pandemic were short-lived, with rents now being equal to or higher than pre-pandemic”.
Greater Hobart remains the least affordable capital city for average rent, following an RAI score decline of 4 per cent resulting in the average rental household paying 29 per cent of their income if renting at the median rate.
Moreover, Greater Brisbane has hit a historic low. The Queensland capital, as a result of an 11 per cent decrease in RAI score over the previous 12 months, is considered moderately unaffordable for the first time.
In Western Australia, Greater Perth experienced a 15 per cent RAI score across the past two years, leading to its lowest rental affordability in six years.
Greater Sydney, Melbourne, and Adelaide, as well as the ACT, all declined in affordability this year despite early pandemic improvement. Returning international tourism and students culminated in rental rates for one-bedroom and two-bedroom dwellings correcting to pre-pandemic levels.
Ms Witte detailed the pandemic’s presence led to the rental crisis spreading from metropolitan areas through to the regions as “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, New South Wales, and Western Australia,” she added.
Regional Queensland and Tasmania are at their most unaffordable in the period measured by the RAI. Additionally, regional Victoria’s affordability declined over the past 12 months at the same rate as Greater Melbourne, while regional NSW’s RAI score fell 14 per cent over the past two years.
Moreover, natural disasters have majorly impacted affordability in certain regional pockets across the country, according to National Shelter chief executive officer Emma Greenhalgh.
“This year’s severe floods also significantly impacted affordability in the Northern Rivers of NSW. Lismore is one of the worst affected towns, where affordability declined by 10 per cent between 2021 and 2022. Bellingen was similarly affected, with affordability declining by 14 per cent,” she said.
More broadly speaking, Ms Greenhalgh elaborated that the impacts of the rental affordability crisis extend beyond financial as “individuals and families are forced to move away from family and friends, driving disconnection”, all while “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,” she added.
This sentiment was shared by Professor Shelley Mallett, director at the Brotherhood of St. Laurence’s Research and Policy Centre, who believes Australia’s rental affordability crisis threatens the stability of public services.
“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,” she said.
“While it’s promising to see plans like the Housing Australia Future Fund, the National Housing Accord, and the development of a National Homelessness Plan, more has to be done to support the health and wellbeing of communities, and low-income earners doing it particularly tough,” Ms Mallett added.
Ms Greenhalgh concluded: “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.”
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