Rental prices may have levelled out in Melbourne but affordability remains at a record low.
That was the finding of the 11th annual National Shelter-SGS Economics and Planning Rental Affordability Index, which compares rents to incomes.
It found Melbourne’s affordability did not change in the last 12 months after a 22% drop was observed from 2021-24.
The city’s median rent of $570 still accounts for 25% of a household income of $116,640, up from 19% four years ago.
The Index found low income households remain under the most pressure with those on JobSeeker benefits paying ‘critically unaffordable’ rents while single part-time workers on parent benefits and single pensioners face ‘extremely unaffordable’ rents.
“The stabilisation of rental affordability is encouraging but there is a long way to go to lift it above crisis levels for many households,” says Tenants Victoria CEO Jennifer Beveridge.
“People on low and even middle incomes are still struggling to find homes they can afford and are being pushed further out of the city. We need to pull every lever to fix this crisis, including greater and faster investment in social and affordable housing.”
INNER MELBOURNE ‘UNAFFORDABLE’
SGS Economics & Planning Principal Ellen Witte says Melbourne’s affordability stabilised when rents no longer rose faster than wages.
“However, the rapid declines seen across many suburbs over the past five years have not reversed,” she says.
“Before 2020, renters could still find affordable homes within 5-10km of the CBD in areas like Footscray, North Melbourne, Parkville, Carlton, and Hawthorn in the southeast.
“An affordable corridor once stretched from Footscray to Meadow Heights but it has now almost completely vanished. Many inner-city suburbs, including Docklands and South Bank, are now considered ‘unaffordable’,” Witte points out.
Coburg and Preston were historically considered affordable but are now classified as ‘moderately unaffordable’.
The Index says the only postcodes across Melbourne classified as ‘acceptable’ are Melton (37km west of the CBD) and Campbellfield (13km north) requiring renters to travel to find affordable rentals.
Robert Pradolin, Founder & Executive Director of Housing All Australians, says there are economic implications to the rental crisis.
“When workers have to commute so far they wake up at the crack of dawn and end up starting work exhausted, Melbourne’s productivity and prosperity is held back,” he says.
“Melbourne’s essential workers such as hospitality staff and nurses are being priced out of the city, which is hugely damaging for the business and communities they serve.
“Affordable housing is essential economic infrastructure like roads and rail.”
TOMORROW: Hobart’s affordability continues to fall
CAPITAL CITY RENTALS
Perth rated more expensive
Rental affordability eases nationally
