Renting on Newstart? Think again

The latest Rental Affordability Index finds renting is particularly dire for Newstart recipients and pensioners 

Newstart recipients cannot afford to rent in any Australian capital city, data from the latest Rental Affordability Index shows. 

Hobart was again found to be the least affordable city in Australia to rent, followed by Adelaide – which overtook Sydney as the second least affordable capital city. 

The annual index found that while rental affordability had slightly improved in Sydney, a person renting on Newstart would need 4.5 times their current income to rent affordably. 

Adrian Pisarski, the CEO of National Shelter, told Pro Bono News this year’s report had a particular focus on Newstart to demonstrate exactly how tough it was to rent on the allowance.     

“There is just nowhere in Australia that a person on Newstart can live affordably or rent affordably,” Pisarski said. 

“Newstart consigns renters to living in poverty.” 

Read more: A sad and sorry history of Newstart

The government allowance for a single adult with no children is currently $489 a fortnight and has not increased in real terms for over 20 years.      

The analysis revealed that for a single person on the allowance, median rents were extremely unaffordable, and some capital cities had become significantly less affordable as Newstart payments were continually outpaced by rising rents. 

For a single person on Newstart, they would have to spend at least 77 per cent of their income to rent in capital cities, and even in the most affordable area to rent – regional South Australia – they would need to spend 47 per cent of their income on rent.

“Rental stress pushes single people on Newstart to the outer fringes of our cities, well away from opportunities to get them back into employment,” the index said. 

Pisarski said this kind of rental stress caused dangerous flow-on effects.  

“These people will go without food, they will go without health care, and ultimately too many of them will end up homeless,” he said.  

Pensioners also at risk  

A single pensioner would have to spend more than half of their income on rent in a metropolitan area, which the report noted was where most single bedroom dwellings were available. 

The index said pensioners also needed to live in a dwelling that had access to transport and local shops and services, which limited where a person could live. 

In Greater Sydney, 88 per cent of a single pensioner’s income would have to be spent on rent, making it the most unaffordable place to rent in the country. 

Pisarski said with more people retiring without owning their own home and facing an unaffordable rental market, the situation was dire.  

“We know older women are the fastest-growing cohort experiencing homelessness and we’d expect increased rates of homelessness among older people based on these findings,” he said. 

Immediate action can be taken  

Pisarski said that for a city such as Hobart, where rents have been increasing by 10 per cent per annum over the last three years, increasing the level of affordable housing stock and clamping down on the number of short-term rental properties on the market could make a big difference. 

“At the moment there is an affordable housing supply issue in the rental market, and we’ve seen a lot of available rental housing lost to holiday rentals to the short-term market,” he said.  

“The rights of renters are weak, and the Tasmanian Residential Tenancy Act needs to be reviewed as Victoria has done.”

The index also comes with a map of rent prices around the country, which Pisarski said community groups should familiarise themselves with to see what was going on in their local area. 

“Make sure you know what’s going on in your local area, and then contact your local MPs and make sure that they know about the index and how bad rental affordability is,” he said.