The Northern Rivers Times
November 23, 2023
38 REAL ESTATE
Deepening crisis: Rental Affordability Index reveals rental calamity for people on low incomes in regional NSW Shelter-SGS Economics & Planning The annual National Shelter-SGS Economics & Planning Rental Affordability Index reveals regional NSW housing is less affordable now than at any point in the last decade, challenging the perception that regional NSW is a safe haven for low- and middle-income households. John Engeler, CEO Shelter NSW, said: “For too long, the regions have been viewed with misty eyes as an
affordable option for Sydneysiders to retreat to when rents got too high in the city. This is not the case, not for newcomers and certainly not for locals living on local industry wages. Since the pandemic, a growing proportion of renters are forced to dedicate more than 30% of their income to rent in the regions. This is not a sustainable situation, it’s a social emergency.” Unaffordability is hurting the economy too. “Unaffordability has spread from employment centres. Households have to live further away
from where the jobs are to access affordable rents, and businesses are struggling to find workers”, according to Ellen Witte, Principal at SGS Economics & Planning. The Report notes that the average rental household in regional NSW has a gross annual income of $84,651 per annum. If renting at the median rate, that household faces paying 29 percent of its total income to rent. This means regional NSW has a Rental Affordability Index score of 102, putting it right on the
verge of being deemed ‘unaffordable’. This represents a 7 percent decline in affordability in the past three years, disproportionately hurting those on the lowest incomes pushed into housing stress to afford a roof over their heads. For a single person relying on JobSeeker, the average regional NSW rental is now ‘extremely unaffordable’, comprising 71% of income. While parts of the State still offer acceptable to very affordable rents
these areas tend to be far-flung, with limited access to services and relatively lower rental stock. Regional centres like Bathurst, Maitland, Wagga Wagga, and effectively the entire coastline including the entirety of IllawarraShoalhaven, all offer at best, moderately unaffordable rents at the median level. “This downward spiral has now reached the point where very few affordable long-term rentals are on offer.” according to Ellen Witte, Principal at SGS Economics & Planning.
“We need to attack this problem from multiple angles. This means rapidly expanding social and affordable housing, rethinking how we use tax subsidies, and strengthening renters’ rights.” A score of 50 or less indicates extremely unaffordable rents, 5180 indicates severely unaffordable rents, 81-100 indicates unaffordable rents, 101-120 indicates moderately unaffordable rents, 121-150 indicates acceptable rents, 150 or more indicates affordable rents.
Rental Affordability Index, Regional NSW
Rental affordability hitting all time lows across the nation: new report city except Hobart National Shelter / SGS Economics and and Canberra and has deteriorated rapidly in Planning Rental affordability has plunged in the past year to reach decade lows in several areas across the country, according to the ninth annual National Shelter-SGS Economics and Planning Rental Affordability Index. Affordability has worsened in every
Sydney (by 13 per cent), Melbourne and Perth (both by 10 per cent). Only Melbourne and the ACT have what are considered acceptable rents for average income households. Affordability in the regions has also declined everywhere except Tasmania with falls of
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between seven and nine per cent in regional QLD, regional SA, and regional WA. National Shelter CEO Emma Greenhalgh said: “Rental affordability in Australia is going from bad to worse. “In the past year renters have been smashed with enormous rent hikes well beyond income growth. “With vacancy rates so incredibly low, landlords have been able to pass on interest rate rises to tenants - and the pressure is only set to increase following last week’s rate rise. “More households in our cities and our regions are in rental stress and many areas are the most unaffordable they have ever been. “Governments must urgently address this worsening affordability crisis, including by building more homes and better regulating renting.” The situation is particularly dire for people on low incomes,
with a single person on JobSeeker having to spend more than 75 per cent of their income to rent a one bedroom apartment in any capital city. Even the regions are severely unaffordable with rents in regional SA - comparatively the most affordable area - still requiring 53 per cent of a JobSeeker’s income. A single pensioner would need to spend 50 per cent of their income to rent in all capitals except Adelaide and Hobart and at least 32 per cent in regional areas. Greater Brisbane, regional QLD, regional VIC and regional NSW posted their lowest affordability levels since 2012, with average households needing to spend between 27 and 30 per cent of their income for a median property in those areas. Greater Sydney is now level with Greater Hobart as the least affordable capital city with a median
rental at $650 a week costing 29 per cent of the average renting household’s income. Greater Brisbane ranks third among the cities with its lowest ever affordability rating and median rentals at $553 a week costing 28 per cent of average income. Regional QLD is now the least affordable place of all regions and capital cities with median rentals at $553 costing 30 per cent of average income, a figure which meets the threshold for rental stress. “Unaffordability has spread from the cities to well into the regions. Households will have to live further away from where the jobs are to access affordable rents, and businesses are struggling to find workers,” said Ellen Witte, Principal at SGS Economics & Planning. “This downward spiral has now reached the point where very few affordable long-term rentals are on offer.
“We need to attack this problem from multiple angles. This means rapidly expanding social and affordable housing, rethinking how we use tax subsidies and strengthening renters’ rights.” The Index was developed in partnership with the Beyond Bank Australia Foundation. Peter Rutter, Chief Community & Strategy Officer, said: “We believe that everybody has the right to safe, secure and affordable housing, which includes rental accommodation. “Through the Beyond Bank Australia Foundation, we invest in projects and initiatives that aim to make this a reality. We are proud to again partner in this important work so that we can continue to understand the cost of living pressures that people are facing and think about how we can work together to overcome them.”
