Latest Rental Affordability Index is ‘Wake-Up’ Call for Swift Action

Australia is in danger of becoming divided between the rich and the rest, according to the latest Rental Affordability Index (RAI).  

The latest figures, released Wednesday, showed pensioners, students and other low income groups have been priced out the rental market in all metropolitan areas across Australia.

The biannual report, produced by National Shelter and SGS Economics, showed that in all cities apart from Perth, rental affordability dropped even further over the last quarter.

Community Sector Banking CEO Andrew Cairns said the report called for swift action.

“The latest RAI is a wake up call  –  without swift coordinated action to tackle housing affordability, Australia will become a divided country, with pensioners, working parents and other low income groups locked out of living in metropolitan areas,” Cairns said.

The RAI tracked rental affordability relative to household income for a number of hypothetical household types and showed that households, even on a median income, were being priced out of all metropolitan areas.

According to the report, if you are a single parent making $70,000 per annum all inner city metropolitan areas in Australia for a two bedroom dwelling are severely unaffordable.

Council to Homeless Persons CEO Jenny Smith said rental affordability was particularly dire for single parents with the report revealing there were only seven Melbourne suburbs that weren’t severely unaffordable for single parents on a low income.

“There’s no escaping high Melbourne rents; it’s a choice of living somewhere unaffordable or severely unaffordable. The RAI shows just how bleak it is if you’re poor and trying to keep a roof over your head,” Smith said.

“It’s particularly worrying if you’re a woman who’s left family violence and looking for a safe, affordable place to live. Women and children are forced to either live in extreme poverty to pay high rent, or move far away from jobs, schools and support services and with high transport costs to find somewhere more affordable,” she said.

Smith said it was “no wonder so many slip into homelessness.”

The peak bodies said the RAI, released one week after the federal budget, gave further confirmation for the need for the government to boost social housing stock.

Smith said: “The federal budget leaves the vast majority of renters no better off. It won’t deliver the massive injection to social housing that we need, it hasn’t properly tackled negative gearing and capital gains tax and there’s no boost to rent assistance to help low-income renters in the private rental market.”

National Shelter executive officer Adrian Pisarski said a united and collaborative effort from government, the community and private sector was needed to address rental affordability.

“While the budget introduced some welcomed measures house price inflation is locking people out of ownership and putting much greater pressure on rental markets which remain unaffordable and displaces low income households into the margins,” Pisarski said.