Rental affordability in major urban centres is slowly improving even as unaffordability spreads to regional and rural parts of the country.
That was the finding of the 11th annual National Shelter-SGS Economics and Planning Rental Affordability Index, which compares rents with incomes.
The Index found rental affordability in the past year improved 1% in Sydney and 4% in Canberra while it held steady in Melbourne and Adelaide.
Affordability fell 1% in Hobart, 2% in Brisbane and 4% in Perth (down from a record low last year) and it fell by 3% in regional Queensland and Tasmania, and by 5% in regional WA.
“The rental crisis is persistent but green shoots are showing,” says National Shelter chairman John Engeler.
“The Federal Government has made vital steps towards turning this situation around (via the Housing Australia Future Fund or HAFF).
“We’re already seeing the delivery of hundreds of homes under the HAFF with thousands in the pipeline which will take pressure off the private rental market.”
He says the time to keep improving affordability is now, by expanding build-to-rent housing.
SGS Economics & Planning Principal Ellen Witte says there has “finally” been stable affordability in many urban centres after rapid falls to record low levels since 2021.
“The stabilisation has been especially visible in the major urban areas where renters are reaching their limit and are unable to pay more,” she says.
“Regional Australia, on the other hand, continues to see unaffordability spread to increasingly remote places.
“The other exceptions are Perth and regional WA, where rents continue to outpace wage growth boosted on the back of growth in employment.”
RENTAL LEVELS ‘STILL UNAFFORDABLE’
Nevertheless, the index says rents still remain unaffordable in large swathes of the nation even for full-time staff. A full-time hospitality worker must spend more than 30% of their income on rent in most capitals and other parts of the states.
In the least affordable places – Perth, Sydney, regional Queensland and regional NSW – even average earners are in rental stress with rents taking up more than 30% of income.
Robert Pradolin, Founder & Executive Director of Housing All Australians, says the rental crisis is having a major negative impact on the economy and productivity.
“From cafes and hotels to hospitals and childcare centres, businesses across Australia are struggling to find staff because there’s nowhere affordable for them to live nearby,” he says.
“To address our social and affordable housing shortfall we must build 44,500 homes each year for 20 years. Governments can’t do this on their own so public-private partnerships will continue to be vital to turning this crisis around.”
MORE RENTAL NEWS: Qld market is in gridlock
TOMORROW: Affordability is crashing ‘out west’.
