Rental affordability has gone backwards for many Australians since last year, despite an increase in the overall number of rental properties.
Every year, Anglicare Australia takes all of the rental properties listed on realestate.com.au during one weekend in autumn and compiles this data into an annual ‘rental affordability snapshot’. This snapshot is designed to show how many rental properties in Australia could be considered ‘affordable’ for people and families in various financial circumstances.
What does the snapshot show?
This year’s snapshot surveyed 51,238 listings across Australia: an increase of around 6,000 from last year. Despite the increase in available listings, the proportion of affordable listings was very similar to last year’s snapshot, with marginal increases for some groups and decreases for others. For a single person receiving the Age Pension, Anglicare Australia identified just 165 affordable listings, or 0.3% of the total number of listings. This was an increase of just 0.1% compared to last year.
For a single person receiving a JobSeeker Payment, the overall number of listings was the same as last year: just 3 properties were affordable. However, because the total number of listings has increased since last year, this means that affordability has declined for this group.
For couples in all circumstances, rental affordability also went backwards over the year. A family of four with both parents receiving the minimum wage saw an increase in the raw number of affordable properties (6,538 compared to 6,025) but a decrease in the percentage (12.8% this year compared to 13.4% last year). Couples both receiving the Age Pension fared worse still, with a decrease in both the number and percentage of affordable listings, dropping from 450 listings or 1% of the total to 334 listings: just 0.7% of all properties.
How is rental affordability measured?
The Rental Affordability Snapshot considers rents to be affordable if they are no more than 30% of a household budget. This is an internationally accepted standard which is also used by the Australian Bureau of Statistics. Of course, many households are forced to pay a much higher percentage of their budget on rent, but doing so often demands that they delay or forego other expenses including bills, groceries, heating or cooling, medical appointments and medication. Importantly, paying more than 30% of their budget in rent also prevents households from being able to build savings or set money aside for emergencies and unforeseen costs.
As many NSW communities face increasing risks from floods and other climate disasters such as cyclones or bushfires, renters will be especially vulnerable if they are unable to build a financial safety net. The 2022 floods in Lismore rendered more than 4,000 homes uninhabitable, but many renters are now forced to try to live in them or face homelessness.
This definition is complicated by the fact that, when the NSW Government develops or funds housing projects, it often requires that the properties be rented at just a 20% discount of market rent for the area to be considered ‘affordable housing’. In practice, many of the homes deemed ‘affordable’ by the NSW Government would cost significantly more than 30% of a household’s income and would thereby be unaffordable by the international standard of rental affordability.
No end in sight for the housing affordability crisis
Anglicare Australia’s report shows that even though Australia is building new housing and providing more rental listings, it is not suitable housing for the people who need it most. So, for all the talk about ‘increasing supply’ during the recent election and the number of new dwellings each year outstripping population growth, much more must be done to fix Australia’s housing affordability crisis.
According to the report, Australia would need to build 15,000 new public and community homes every year to maintain the current ratio of social housing, and would need to build 25,000 new public and community homes to actually fill the growing need for affordable housing. Instead, we are going backwards, with only around 3,000 new public and community homes being added to the housing stock per year.
In the meantime, the NSW Government’s new rental protection laws have recently come into effect, protecting renters from so called ‘no grounds’ evictions where leases could be terminated without any reason and limiting some additional fees often charged by real estate agents at the beginning of a tenancy. While these changes are positive, they won’t be enough to make renting more affordable.
Every year, Anglicare Australia takes all of the rental properties listed on realestate.com.au during one weekend in autumn and compiles this data into an annual ‘rental affordability snapshot’. This snapshot is designed to show how many rental properties in Australia could be considered ‘affordable’ for people and families in various financial circumstances.
What does the snapshot show?
This year’s snapshot surveyed 51,238 listings across Australia: an increase of around 6,000 from last year. Despite the increase in available listings, the proportion of affordable listings was very similar to last year’s snapshot, with marginal increases for some groups and decreases for others. For a single person receiving the Age Pension, Anglicare Australia identified just 165 affordable listings, or 0.3% of the total number of listings. This was an increase of just 0.1% compared to last year.
For a single person receiving a JobSeeker Payment, the overall number of listings was the same as last year: just 3 properties were affordable. However, because the total number of listings has increased since last year, this means that affordability has declined for this group.
For couples in all circumstances, rental affordability also went backwards over the year. A family of four with both parents receiving the minimum wage saw an increase in the raw number of affordable properties (6,538 compared to 6,025) but a decrease in the percentage (12.8% this year compared to 13.4% last year). Couples both receiving the Age Pension fared worse still, with a decrease in both the number and percentage of affordable listings, dropping from 450 listings or 1% of the total to 334 listings: just 0.7% of all properties.
How is rental affordability measured?
The Rental Affordability Snapshot considers rents to be affordable if they are no more than 30% of a household budget. This is an internationally accepted standard which is also used by the Australian Bureau of Statistics. Of course, many households are forced to pay a much higher percentage of their budget on rent, but doing so often demands that they delay or forego other expenses including bills, groceries, heating or cooling, medical appointments and medication. Importantly, paying more than 30% of their budget in rent also prevents households from being able to build savings or set money aside for emergencies and unforeseen costs.
As many NSW communities face increasing risks from floods and other climate disasters such as cyclones or bushfires, renters will be especially vulnerable if they are unable to build a financial safety net. The 2022 floods in Lismore rendered more than 4,000 homes uninhabitable, but many renters are now forced to try to live in them or face homelessness.
This definition is complicated by the fact that, when the NSW Government develops or funds housing projects, it often requires that the properties be rented at just a 20% discount of market rent for the area to be considered ‘affordable housing’. In practice, many of the homes deemed ‘affordable’ by the NSW Government would cost significantly more than 30% of a household’s income and would thereby be unaffordable by the international standard of rental affordability.
No end in sight for the housing affordability crisis
Anglicare Australia’s report shows that even though Australia is building new housing and providing more rental listings, it is not suitable housing for the people who need it most. So, for all the talk about ‘increasing supply’ during the recent election and the number of new dwellings each year outstripping population growth, much more must be done to fix Australia’s housing affordability crisis.
According to the report, Australia would need to build 15,000 new public and community homes every year to maintain the current ratio of social housing, and would need to build 25,000 new public and community homes to actually fill the growing need for affordable housing. Instead, we are going backwards, with only around 3,000 new public and community homes being added to the housing stock per year.
In the meantime, the NSW Government’s new rental protection laws have recently come into effect, protecting renters from so called ‘no grounds’ evictions where leases could be terminated without any reason and limiting some additional fees often charged by real estate agents at the beginning of a tenancy. While these changes are positive, they won’t be enough to make renting more affordable.
