It’s Becoming Impossible to Find Affordable Housing in Every Single Capital City

Renting an affordable home in any of Australia’s capital cities is verging on impossible, as massive rent hikes and stagnant wages leave scores of the nation stretching themselves to pay their bills. 

The latest rental affordability index, which compares household incomes to market rents and was released by SGS Economics and National Shelter overnight, shows that rental affordability is notably falling in every capital city across the country. 

The index, which suggests that those spending more than 30 percent of their income on rent are in housing stress, found that Hobart continues to be the least affordable capital city in Australia for average renters (a mantle it’s held since 2019), while levels of affordability in Greater Brisbane have hit a historic low, the largest fall of any capital city.

Ellen Witte, a partner and principal at SGS Economics, said the freezes and falling rents seen through periods of the pandemic have well and truly tapered off. Now, she said, rents are either equal to, or well above, what was seen three years ago. 

“The pandemic also saw the existing rental crisis spread to the regions, when many households left capital cities,” Witte said. 

“More and more regional households are struggling to pay their rent and key workers are unable to access housing, especially in the regional areas of Queensland, Tasmania, NSW and Western Australia,” she said. 

But it’s the nation’s regions that have been hit hardest. The catastrophic floodwaters that tore through the northern rivers of NSW earlier this year had devastating impacts on rental affordability across the region, too. Lismore, for example, saw rental affordability plummet some 10 percent over the last year. 

The Mid-North Coast town of Bellingen, where catastrophic flooding similarly took hold earlier this year, also saw a devastating drop of 14 percent in affordability over the same period.

As a result, National Shelter’s chief executive, Emma Greenhalgh, has joined growing calls on the federal government to start establishing controls in the private market, like capping rent increases and boosting Commonwealth Rent Assistance. 

“Rental Increases mean individuals and families are forced to move away from family and friends, driving disconnection at the same time they are struggling to find money to pay for essentials like food, utilities and healthcare,” Greenhalgh said. 

“Key workers, including nurses and teachers, often can’t afford to live in the communities they serve.”

But hospitality workers, students, minimum wage workers, pensioners and those living on income support unsurprisingly face the worst odds. 

For those living in “student sharehouses”, for example, the working assumption is that your estimated gross annual income is about $84,000, which will not get you an affordable home in any of Australia’s capital cities. 

The criteria here assumes that each person living in the home is on income support of some kind—whether Youth Allowance or Austudy—and that everyone is working the maximum additional income allowable before support payments start to take a hit.

According to the index, a student sharehouse generally houses three students between the ages of 18 and 35 looking to rent a three-bedroom home. 

To meet that 30 percent rule, the index found that affordable homes for this cohort will only be found in Greater Melbourne, regional Victoria, Greater Adelaide, Greater Perth, Regional Western Australia, and Regional Tasmania.

For those trying to rent a home on a low income, or paid for solely with income support payments, it’s close to impossible. 

Rental affordability for people on JobSeeker payments, for instance, remained poor over the last year, even when the rate was temporarily increased by the federal COVID-19 supplement. As payments have dropped significantly, rents have started to skyrocket. 

The latest rental affordability index tracks with various other indicators released throughout the year, too. 

In April, Anglicare released its most recent annual rental affordability snapshot, which found that only 2 percent of the rental properties on the market through March, across the entire country, were classified as “affordable” to workers on the minimum wage. 

For those who rely on Centrelink for income support of any kind, matters were even worse. 

Someone on the age pension, for instance, would only have been able to afford 312 rental properties across the entirety of Australia in March—that’s less than 1 percent of the market. 

Shortly after Tuesday’s index was published, Greens MP Max Chandler-Mather called on prime minister Anthony Albanese to hold a national cabinet meeting to consider urgent rental market “intervention”. 

“Australia desperately needs national tenancy standards that include an emergency two year freeze on rent increases, followed by ongoing rent caps and end to no grounds evictions,” Chandler-Mather said. 

“It’s no wonder we’ve seen families living in cars and tents, when renting in cities around Australia is severely unaffordable for those on JobSeeker, single pensioners and single parents working part-time, with rents surging over 60 percent in many cities,” he said.

“Millions of Australians are struggling to pay the rent and it’s only getting worse—it’s time for the Government to intervene and give renters some immediate relief.”

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