Rental affordability in Sydney and its surrounds is at a record low, with greater Sydney holding firm as the least unaffordable metropolitan region in the country.

The latest index on rental affordability, published on Wednesday, shows that apart from Perth, all metropolitan areas experienced a decline in rental affordability in the final quarter of 2016.

The report, compiled by SGS Economics & Planning and National Shelter, considers households where rent costs exceed 30% of household income to be under rental affordability stress.

“The situation remains dire for low-income households in metropolitan areas across Australia,” the report found.

“Rents remain severely unaffordable within a 10-kilometre radius from the Sydney CBD, with the average household facing rents at more than 60% of their total income in some inner postcodes, and more than 40% in most other postcodes within this radius.”

Greater Melbourne remains the second most unaffordable metropolitan area, though had not changed significantly since the previous quarter.

Victoria remains the only state to have lower rental affordability in regional areas than in the greater metropolitan area of Melbourne, the report found, with many regional cities considered moderately unaffordable to unaffordable.

Those living in regional Victoria generally have low household incomes relative to rents.

In Perth and surrounding suburbs, rent is growing in affordability, the report found, though some areas north of the river remain unaffordable to severely unaffordable. The average rental household in greater Perth rents at 21% of its total income – the most affordable of all the metropolitan areas studied.

The Council to Homeless Persons CEO, Jenny Smith, said it was worrying that the data showed a single parent on a low income could rent in just seven Melbourne suburbs if they wanted to avoid severely unaffordable rents.

“It’s a dire situation to be in if you’re a single parent, struggling to look after children, scraping by on a low-income and trying to find a place to live,” Smith said.

“With so few affordable options, no wonder so many slip into homelessness.

“It’s particularly worrying if you’re a woman who’s left family violence and looking for a safe, affordable place to live. Women and children are forced to either live in extreme poverty to pay high rent, or move far away from jobs, schools and support services and with high transport costs to find somewhere more affordable.”

She said the report was further evidence that the federal government needed to increase social housing stock, and implement more measures to assist renters.

“The federal budget leaves the vast majority of renters no better off,” she said.

The report also shows that pensioners in particular are being forced out of the city to find affordable rent or pay more than 60% of their income.

Australia’s leading seniors’ advocacy body, Cota Australia, said it was having a devastating impact on the quality of life of older Australians in the rental market.
“Too often we hear stories of age pensioners who are left to choose between using the last of their income to buy food or medication once they have met their obligations for rent and utilities,” Cota said in a statement.

“And we know that the fastest growing group of homeless people are older women who just can’t meet the growing costs of rent and other basic needs.”