People with low incomes are being pushed out of the rental market

NOT everyone can afford to buy a house, but what if you’re one of those people who can’t even afford to rent a place to live?

Renting is becoming even more difficult for low income earners. Source: iStock

NOT everyone can afford to buy a house, so many stick to the rental market.

But what happens when even that becomes too expensive?

People are being pushed out of Australia’s capital cities and soaring rental prices are leaving a lack of options for people who are struggling financially.

A report released by Anglicare discovered just how hard it was for low income earners to put a roof over their heads.

In Melbourne alone, people are being forced to look at sharing two-bedroom homes with eight people.

Some are even paying an exorbitant amount of money just to rent a bunk bed in a room full of strangers.

Others are paying more than $100 to sleep at the end of corridors and hallways.

Even these desperate options are becoming too expensive for those with low incomes.

People on the minimum wage receive about $34,000 a year before tax and they are being hit hard along with those on government payments like Newstart, Youth Allowance, Parenting Payment and the Age Pension.

Anglicare looked at more than 75,000 properties across Australia to see whether they were affordable or appropriate for people on a low income and the results were dire.

Singles living off an Age Pension could only afford to pay rent for 2.1 per cent of the properties looked at.

That was more than those living off the Disability Support Pension, who could only afford a shocking 0.5 per cent.

Worse than that, singles living off Newstart and Youth Allowance could only afford to live in 0.5 per cent of the properties.

Anglicare Sydney chief executive Grant Millard said it was unacceptable that people on low to medium incomes were struggling to keep a roof over their heads because of a lack of affordable rental properties.

“Low income earners are pushed into rental stress when they’re compelled to pay 30 per cent or more of their income in rent,” he said.

“We’ve seen people trying to survive on $20 for a week after the weekly rent and bills have been deducted. Some are on the verge of homelessness.”

Anglicare believes rentals are affordable if they cost less than 30 per cent of a household’s total income.

A dwelling is deemed appropriate if it has the right number of bedrooms for the amount of people living at the property.

SYDNEY

Mr Millard said out of 14,774 properties looked at in Greater Sydney and the Illawarra Region, only 76 were affordable and appropriate for those on income support payments.

“Rental affordability in Greater Sydney for low income households has been consistently low for the past four years, hovering at less than one per cent,” he said.

The number of affordable properties is down from the three per cent last year and four per cent in 2014.

The Anglicare report found in the Greater Sydney and Illawarra Region, there were no affordable properties for singles on Newstart, the Disability Support Pension or Youth Allowance.

Youth Allowance is the lowest income support a person can receive, it’s only $216.60 a week.

Out of the thousands of properties Anglicare looked at, the organisation found only 14 suited singles on the Aged Pension.

Couples with two children living off Newstart could choose from 12 properties but single parents living off the Parenting Payment with two children could only afford three properties.

Single parents on the Parenting Payment with one child only had two options.

Last year rent prices in Sydney were 12 times higher than the median household income could afford.

MELBOURNE

Out of the 17,330 property listings Anglicare looked at in Melbourne, only two were suitable for a single person on the Parenting Payment and there were only three options for a couple with two children on Newstart.

Single people on Newstart or the Disability Support Pension only had a choice of four properties.

For a couple both earning the minimum wage, the chance of renting in Stonnington, Port Phillip, Bayside, Glen Eira, Boroondara, Whitehorse, Yarra, Moreland, Maribyrnong and Moonee Valley areas is between zero and two per cent.

Anglicare found a person on Youth Allowance could only afford to spend about $67 a week on rent making it very hard for young people who were attempting to become financially independent.

Anglicare Victoria chief executive Paul McDonald said this rental crisis would have a catastrophic impact on people.

For Victorians wanting to enter the rental market, they must pay way more than what they can afford and accept the burden of financial stress or cut out paying for necessities like food and utilities.

Anglicare found people who lived in housing that was inappropriate had a lack of stability and safety in their lives and often dealt with psychological stress, community disconnection and poverty.

Last year rent prices in Melbourne were nine times higher than the median household income could afford.

BRISBANE

Anglicare looked at more than 7000 properties in Brisbane across 202 suburbs and found only 68 were suitable for people living off some type of income support payment.

People living off the minimum wage could choose from almost 900 homes across the city.

Anglicare broke down exactly what per cent of a person’s income would need to be spent to afford certain properties in Brisbane.

A family of two adults on Newstart with two children would need to spend 50 per cent of their household income to afford a three-bedroom property that costs about $450 a week on average.

A single parent with one child on the Parenting Payment would need to fork out 68 per cent of the whole household income for a two-bedroom dwelling that costs on average about $410 a week.

If a single parent is on Newstart rather than the Parenting Payment, and has a child over the age of eight, they will have to give up 81 per cent of the household income for a two-bedroom property.

A single person earning the minimum wage would have to spend 63 per cent of their income on a one-bedroom place that cost $370 a week.

The same property would take 75 per cent of the household income from a single on the aged or disability pension.

If a person on Newstart decides to spend $180 a week to share a room, that would take 55 per cent of their weekly income.

Those on Youth Allowance vying for the same property would lose a massive 70 per cent of their income.

Last year rent prices in Brisbane were six times higher than the median household income could afford.