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Rental affordability hits new record low for minimum wage earners: Report

By Zarah Torrazo
28 April 2023 | 11 minute read
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An alarming report showed rental affordability has crashed to a record low for some of the nation’s most vulnerable, prompting an “urgent plea” for the government to boost the supply of social and affordable homes across the country.

Less than 1 per cent of rental properties in the country are affordable for minimum wage workers, while people on Centrelink payments are finding it difficult to secure tenancy even in share houses, according to Anglicare Australia’s annual Rental Affordability Snapshot. 

These findings come after the community organisation analysed 45,895 rental listings across Australia over a single weekend, which the report noted was the lowest in the 14 years Anglicare has curated the report. Between 2018 and 2021, the number of available rentals listed was consistently above 65,000. 

Afterwards, the report assessed whether the properties available on the market would be affordable for 13 different types of households, with affordable rent defined as no more than 30 per cent of a household budget. 

Findings showed only 66 rentals — or 0.1 per cent of the listings analysed — were affordable for a person on the disability support pension, while 162 rentals (0.4 per cent ) were affordable for a person on the Age Pension. 

There were just four properties suitable for singles receiving JobSeeker, which currently pays a single person with no children $693.10 a fortnight.

Meanwhile, of the tens of thousands of properties analysed, the organisation found only four rooms in share houses that were affordable for a person receiving Jobseeker, which currently pays a single person with no children $693.10 a fortnight.

Shockingly, there were no listings found that were affordable for a person on youth allowance, which provides assistance of between $332.90 and $720.40 a fortnight in most cases.

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These alarming figures followed the release of recent research from Homelessness Australia, which revealed that young renters on youth allowance sharing a typical two-bedroom apartment have only $13 a day left over after they cover the cost of housing.

Kasy Chambers, the executive director at Anglicare Australia, said the drop in affordability was shocking.

“Each year, we think the market couldn’t get any worse. And each year, we’re shocked to see that it can,” she stated. 

She noted that one figure highlighted how dire the country’s housing situation is. “This is the first time we have ever seen the number of affordable listings for a full-time minimum wage earner crash to below 1 per cent,” Ms Chambers said. 

This year’s snapshot was the worst result for renters earning the minimum wage, with just 345 rentals (0.8 per cent) considered affordable, down from 720 (1.6 per cent) in 2022.

“If full-time wage earners are doing it tough, then people on Centrelink payments don’t stand a chance,” Ms Chambers noted. 

The executive said that the best way to tackle the rental crisis is to build social and affordable rentals, as it had become clear that “the private market is failing people on low incomes”.

Even though Australia had built a record number of homes over the last 10 years, she pointed out that “rents keep soaring”.

“Our social housing shortfall has now ballooned to 640,000 social homes across Australia. Ending this shortfall will help people in the most severe rental stress, and free up the cheapest rentals for everybody else.

If the country fails to address the housing crisis, the executive emphasised that “we do not stand a chance of ending rental stress in Australia”. 

“We’re calling on the government to build social homes in the next budget and make sure everyone has a place to call home,” Ms Chambers concluded.

The rental crisis is deepening across the country’s capital cities. Domain’s March rental report showed the country’s vacancy rate remained at 0.8 per cent, while average capital city rents were up 13 per cent year on year to $565 a week. 

With the rental squeeze raging on and showing no signs of abating, peak real estate bodies from several states, including NSW and Queenslandas well as real estate industry leaders have joined the call for the government to address the crisis, namely by boosting housing supply.

 

 

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