Housing affordability

Australia is in the midst of a rental affordability crisis, report finds

New South Wales is the least affordable state with a family on $500 a week spending 65% of their income on rent as home ownership rates also shrink

A house for lease in Melbourne.
A house for lease in Melbourne. Inner Melbourne and Sydney are the worst places for rental affordability in Australia, according to Shelter. Photograph: David Crosling/AAP

Australian Associated Press

This article is 1 month old

Australia is suffering a rental affordability crisis as home ownership shrinks and more people are squeezed out of renting a home by soaring prices, a new report reveals.

The first Rental Affordability Index produced in Australia shows renters face a greater financial challenge than homeowners. Rental housing is slipping beyond the grasp of low-income families, who are faced with paying almost two-thirds of their income in rent, the index shows.

Even moderate income households, earning about $1,000 to $1,500 a week, are at or near the “housing stress” threshold where rent eats up 30% of their weekly pay.

Adrian Pisarski, executive officer of housing affordability organisation Shelter Australia, said a family on $500 a week faced spending 65% of their income on rent in NSW, the most unaffordable state.
The situation is marginally better elsewhere, with rents in Queensland and Tasmania eating up 54%, South Australia 59% and Western Australia 57%. Inner Melbourne and Sydney are the most unaffordable places for renters.
The index reveals low-income families are suffering nationwide and that non-family households, such as pensioners and single people, suffer the worst.

The report notes that causes of homelessness are shifting from factors such as escaping abuse, mental health issues and substance abuse to simply being pushed out by people on higher incomes.

“The picture nationally shows a country where renters choose between housing poverty closer to centres, or lower opportunity and high transport costs with long commutes,” Pisarski said.

Joe Sheehan, spokesman for Community Sector Banking, a non-profit banking organisation that sponsors the index, said Australia should be building 180,000 affordable houses annually.

Mortgage costs have jumped from 44% of a worker’s wage a decade ago to 61% now, while the number of people under 34 buying houses has plummeted.

Sheehan said Australia needed to act urgently, with a national plan to improve housing availability and affordability.