Australia’s rental market is failing too many people, according to the latest Rental Affordability Index (RAI) – particularly pensioners, working families with children, and young adults. Overall, Sydney remains the least affordable city for renters, followed by Hobart.
Renters in Greater Sydney have to set aside at least 29% of their income to cover rent. In Greater Hobart, the percentage is 28%.
The Rental Affordability Index has been released biannually by National Shelter, Community Sector Banking, and SGS Economics & Planning since 2015. It provides an easy-to-understand indicator of the price of rents relative to household income.
The latest RAI made it clear that low-income households and society’s most vulnerable members, including students and older women, could no longer afford to live in metropolitan areas, where more employment opportunities could be found.
“The reality is, 31% of households rent and many will never have the opportunity to purchase their own home,” said Ellen Witte, Partner at SGS Economics & Planning. “In many countries renting is an affordable, long term and secure way of living but barriers to large scale investment in delivery models such as ‘build to rent’ put the Australian market in a headlock.”
Young households and pensioners highly vulnerable in Sydney and Melbourne
Both Sydney and Melbourne are extremely unaffordable for pensioners. Couples have to set aside 59% of their income, and singles 97%, for a new lease in Sydney. In Melbourne, couples have to set aside 48% of their income, and singles 68%, for a new lease.
Young households, including students and families with young children, are also suffering. Students with a job on the side and living in a share house have to set aside 34% of their income on rent in both Sydney and Melbourne. This percentage can hit 60% the closer they are to the city centre.
People in extreme mortgage stress struggle to meet their primary needs, such as food, air conditioning, medicine, and transport.
“The latest RAI shows we need a new collaborative approach to addressing rental affordability,” said James Barron, head of relations at Community Sector Banking. “If the availability of affordable rental housing is not addressed, we risk jeopardising the productivity and wellbeing of our communities, and leaving behind those who are already disenfranchised.”
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