Yahoo Finance Surprising Aussie capital most expensive for renters
Aussies are being hit with ”unsustainable” rent increases, according to the latest release of the Rent Affordability Index (RAI).
The research revealed every Australian capital city was experiencing a decline in rental affordability, but despite skyrocketing prices, it’s not Sydneysiders being hit the hardest.
Hobart is actually Australia's least affordable capital, a title it has held since 2019, with high rents almost on par with household incomes.
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Regional areas have also been hit hard, with severe flooding in New South Wales seeing affordability plummet.
National Shelter CEO Emma Greenhalgh said the nation’s social and economic well-being was at risk, with housing stress and homelessness increasing as Australia experienced a lack of affordable housing options.
“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 health care,” Greenhalgh said.
“Key workers, including nurses and teachers, often can’t afford to live in the communities they serve.”
The report found rents across the country were rising faster than incomes and Aussies moving out of capital cities to avoid higher prices were in turn pushing prices higher in regional areas.
The RAI uses the 30 per cent income rule, meaning whenever individuals, couples or families pay 30 per cent or more of their income on rent they are in a situation of “rental stress”.
That means they have insufficient funds to pay for other primary needs like food, medicine, transport and heating.
“We found that the static or slightly falling rents of the early pandemic were short-lived, with rents now being equal or higher than pre-pandemic, and Hobart still the least affordable city,” lead author of the report and partner at SGS Economics and Planning Ellen Witte said.
“The pandemic also saw the existing rental crisis spread to the regions, when many households left capital cities. 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.”
This year’s severe flooding also significantly impacted affordability in the Northern Rivers of NSW, the report found.
“Lismore is one of the worst affected towns, where affordability declined by 10 per cent between 2021 and 2022. Bellingen was similarly affected, with affordability declining by 14 per cent,” Witte said.
Greenhalgh said low-income renters needed more active intervention to help alleviate the issue.
“We need rental reform - that includes limiting rent increases, and adjustments to income support including Commonwealth Rent Assistance,” she said.
“We also need greater investment in social and affordable housing to reverse a decade-long decline.”
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