Although Sydney is still Australia’s least affordable city for those in the rental market, Melbourne has experienced the biggest drop in affordability since 2013, according to the latest Rental Affordability Index (RAI).
CEO of not-for-profit banking specialist Community Sector Banking Andrew Cairns says the latest Index shows that for renters, housing stress is a common reality, particularly for low income earners.
“People in the lowest income households are being pushed out of the rental market, and into poverty and homelessness - this situation is most dire in Sydney.”
The RAI is produced by advocacy group National Shelter, Community Sector Banking and leading planning and economics firm SGS Economics & Planning and complements the Housing Affordability Index (HAI), which is a price index for the purchase of houses.
National Shelter executive officer Adrian Pisarski said the index shows “low income households continue to face unaffordable rents and high levels of housing stress despite some improvements in the rental market - additional supply in capitals has not eased rental affordability for low income households.
“We are most concerned that there is no national strategy to tackle housing affordability, especially when we see that additional supply is not reaching low income households, and increases in homelessness are being reported.”
Associate at SGS Economics and Planning Ellen Witte warned that, “although low and single income households are worst off, even average households would struggle if rents become less affordable.
“With home ownership falling further out of reach for many households, rental unaffordability is a key issue to address in Australia’s housing equation. The index shows rental affordability is dividing Australia, with service rich areas tending to be very unaffordable, while service poor areas are more affordable, particularly in Sydney, Melbourne and Perth,” said Witte.
Cairns calls for the nation to wake up to the rental crisis. “There is a dire need for innovative financial models to support more affordable housing and we’re calling on governments, companies and philanthropists to collectively use their power to create sustainable solutions now,” he said.