- As of Feb 2023, 640,000+ Australians are housing stressed or homeless.
- This figure will grow to almost one million by 2041, the Savvy report forcast.
- Affordability requires collaboration between landlords, tenants, and agents.
Soaring rents are putting households under extreme pressure with a new report finding that 42 per cent of all low-income households are paying more than 30 per cent of their income on housing.
Rental stress is even more severe in New South Wales, where households are paying 47 per cent of their income in rent, while Greater Brisbane experienced the sharpest decline in rental affordability
According to the report from Savvy, the lack of affordable housing stock, high levels of immigration and rising property prices are some of the factors driving the lack of rental properties.
The issue is particularly acute for single-parent families, low-wage workers, and older Australians on fixed incomes.
“Rental stress is impacting low-income households the most,” the report said.
“As of February 2023, more than 640,000 Australian households are under housing stress or homeless. It is forecasted that this figure will grow to almost one million by 2041.”
Singles receiving JobSeeker, pensioners, and part-time working parents have an RAI score that ranges from Unaffordable to Extremely Unaffordable, with the Rental Affordability Index showing they spend 30 to 60 per cent or more of their gross income on rent.
“Hospitality workers are also struggling, with rental affordability Moderately Unaffordable to Severely Unaffordable,” the report said.
Supply can’t keep up
The report found that current market conditions have been closely linked to demographic trends throughout the pandemic, when the supply of properties was unable to keep pace with household growth.
On top of this, employment changes and a strong return in overseas migrations have added to demand and led to rents increasing by more than 10 per cent in 2022.
“Compared to a decade ago, there is less social and affordable housing stock available, making many low-income earners very reliant on the private rental market where they are forced to pay unaffordable rents,” the report said.
“Rising property prices and stagnant wages have made it difficult for many people to enter the property market, leading to a growing reliance on rentals.”
Unaffordability is spreading
The report also found that the lack of rental supply is partly due to investors and natural disasters.
In recent years, more apartments are sitting vacant in inner–city areas while investors hold onto their properties for long-term capital gains.
This reduces the availability of rentals, and coupled with the lack of new developments, increased immigration, and population growth, Australia is now facing another rental crisis.
The report said, “While improved affordability is on the horizon for renters in some cities, for low-income tenants, this is an insignificant development.
“It is a very minor tangible improvement for renters in Brisbane, Adelaide, and Perth too. Rental affordability for these areas has declined significantly in the last two years.”
The report found that the most obvious solution is to build more well-located housing that is affordable for low-income renters.
The report said, “This can be achieved by fast-tracking the supply and resolving conflict between landlords, tenants, and agents for a stronger community.
“The government needs to focus on building more affordable housing and improving rental affordability.
“This can be achieved through collaboration between landlords, tenants, and agents for a stronger community.”
