This New Report Confirms How Completely Cooked The Rental Market Is Right Now
Things are especially awful if you're a student.
The results of the latest biannual Rental Affordability Index (RAI) are in and, at the risk of stating the obvious, the news is not great!
According to the study (conducted by SGS Economics & Planning for National Shelter and Community Sector Banking using data from the last quarter of 2016) rental affordability has dropped in every major metropolitan area around the country except for one. Pack your bags folks, it’s time to move to Perth!
In Melbourne, the average renter can expect to pay 24 percent of their income on rent. In Brisbane and Adelaide that number rises to 25 percent, and in Hobart it’s 28 percent. In Sydney it’s at 29 percent, which is the worst it’s even been.
Incidentally, at 30 percent, you’re officially experiencing “housing stress”. This is defined as the point when the cost of your rent begins to impact your ability to pay for other essential services. Things like transport. And electricity. And food.
“The situation remains dire for low income households in metropolitan areas across Australia,” says the the report. Love it when financial reports use words like “dire”.
Things are looking especially grim for students too. As an example, the report considers a three-person student sharehouse in which each renter earns $25,100 per year, including welfare benefits in the form of either Youth Allowance or Austudy. For this household, the report classifies rental prices in Greater Sydney and Greater Melbourne, as well as the inner suburbs of Brisbane and the Gold Coast, as “severely unaffordable”. This means they’re paying between 38 and 60 per cent of their income on rent, well above the threshold for housing stress.
“The student sharehouse is moreover required to balance work and study, and the number of hours manageable varies on course demands,” reads the report. “On top of this, students have additional study costs and administration fees, and renting students may have limited capacity to save or make voluntary payments to accumulating HECS or FEE HELP debts.”
Student rental prices in Sydney and Melbourne. Red is bad.
Unsurprisingly, rent gets the cheaper the further you are from an urban centre, although as SGS Senior Associate Ellen Witte points out, living outside of the city presents its own set of challenges. “Rents are most affordable in places where the least opportunities are in terms of jobs, services and education,” she told news.com.au.
Meanwhile, the latest federal budget features no increase in rental assistance programs and no significant funding increases for social housing and homelessness services. It also does basically nothing to combat the housing affordability crisis — one of the flow-on effects from which is an increased demand for rental properties, which in turn makes rent more expensive and makes life harder for low-income earners struggling to keep a roof over their heads.
It does, on the other hand, allocate money for the random drug-testing of welfare recipients. Good to know they’ve got their priorities in order, hey.
SGS have also developed an interactive map where you can enter your information in order to calculate where you can afford to live. You can try it out here, although fair warning, you might not like what you find.