‘Unfathomable’: living crisis for 8m Aussies laid bare
A ‘grim picture’ has emerged of just how tough millions of Aussies are doing in this cost of living crisis.
Property
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OPINION
Surging rents and a lack of affordable housing over recent years have pushed the situation for renters to its worst level in recent history. We are in a crisis that seems unfathomable for a country like Australia.
The new PropTrack Rental Affordability Report, released this weekend, reveals a grim picture for the third of the population who rent. For tenants of all incomes, it’s never been harder to find or afford a home.
There just aren’t enough available rentals for those who need them.
Vacancy rates are sitting around record lows in most parts of the country. That means it is not only challenging to find a rental, but competition is also fierce for those that do crop up and they inevitably lease very quickly.
These incredibly tight and competitive conditions mean rents have surged, and incomes haven’t kept up. Since the pandemic began, median advertised rents on realestate.com.au have increased 38 per cent. Some cities have seen even faster increases, with Perth leading the pack with an eye-watering 67 per cent, or $240 a week, increase in the span of just under four years.
Affordability is especially dire for our lowest-income renters. For a household at the 30th income percentile – earning $67,000 per year – just 3 per cent of recently advertised rentals on realestate.com.au are affordable. To afford even one in 10 advertised rentals, this low-income household would need to spend nearly a third of their income on rent. For households earning less than this, essentially no rentals are affordable.
This is not a situation we can afford to ignore. We should all care about the current rental crisis.
Most people will rent at some point in their life, and at any given time the rental market directly affects around half of Australian households. Roughly three in 10 Australian households rent and a further two in 10 own an investment property. Alongside that, there is a sizeable industry and ecosystem that supports our rental market. Solving the rental crisis will be challenging and there are no easy fixes, but there are solutions we can pursue today that would help.
In the near term, further raising Commonwealth Rent Assistance would help offset the surging cost of rent for low-income households least able to adjust to these costs, and for whom affordability is especially dire.
Longer term, sustainably improving rental affordability will only come about if we alleviate the incredibly challenging availability renters are facing.
National cabinet has agreed to build 1.2 million well-located homes over the next five years. Focusing on increasing housing supply is critical. But at our current pace of building, we will fall well short of that target so we need to do more.
A healthy, well-functioning property market is crucial for everyone. Secure and affordable housing should be a national priority, and nowhere is this more important than ensuring low-income and vulnerable households can afford a home to rent.
Given the challenging state of affordability, now is the time for all levels of government and industry to act to improve housing outcomes for current and future generations.
* Melina Cruickshank is the REA Group’s Chief Product and Audience Officer
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Originally published as ‘Unfathomable’: living crisis for 8m Aussies laid bare
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