Sydney’s rental affordability is showing some signs of marginal improvement after years of rapid decline, says a new study.
The 11th annual National Shelter-SGS Economics and Planning Rental Affordability Index compares rents with incomes.
It found that the average household weekly rental in Sydney accounts for 30% of weekly income, the commonly accepted threshold for housing stress.
While Sydney’s affordability improved 1% in 12 months, western and south-west Sydney (from Camden to Liverpool to Parramatta) deteriorated to ‘moderately unaffordable’ or ‘unaffordable’ levels.
“Sydney remains one of Australia’s least affordable rental markets though there are early signs of a stabilisation and perhaps some hope after years of deterioration,” said Shelter NSW CEO John Engeler.
“To maintain this momentum, we need to build on the delivery of hundreds of homes under the Housing Australia Future Fund.
“Thousands more homes are in the pipeline and these will take pressure off the private rental market but our scale of ambition must not weaken,” Engeler says.
“Housing is Australia’s most pressing social and economic challenge.”
AFFORDABILITY DESERTS IN SYDNEY
SGS Economics & Planning Principal Ellen Witte says: “After reaching historic lows from 2021-24, Sydney’s rental market shows signs of stabilising, though it remains deeply unaffordable.”
“The city’s harbour, northern, and coastal suburbs are an affordability desert with no coastal areas offering acceptable rents. To find acceptable rents, the average household must travel at least 15-20km from the CBD to areas like Campsie, Lakemba or Rosehill.”
The report found that even full-time workers face severe rental stress across much of Sydney; a full-time hospitality worker needs to spend 42% of their income on rent while a single full-time working parent would spend 33%.
For vulnerable groups, the situation is even more dire, the study says; a single person on JobSeeker would need to spend 131% of their income on rent.
“Suburbs in western and south-west Sydney were once among the city’s most affordable regions but they no longer offer the same rental respite and deteriorated to moderately unaffordable or unaffordable levels,” Witte says.
Robert Pradolin, Founder & Executive Director of Housing All Australians, describes the crisis as “productivity poison”.
“Cafes, hotels, hospitals and childcare centres across Sydney are struggling to find staff because there’s nowhere affordable for them to live nearby,” he says.
“When they do find them, the commute is so long that workers have to wake up at the crack of dawn and end up starting work exhausted. This is productivity poison.”
With a median weekly rent of $750 and an average rental household salary of $130,273, the small improvement seen offers little relief to thousands of Sydney renters in housing stress, the index says.
IN REGIONAL NSW
Regional NSW is now officially less affordable than Sydney with more than 30% of household income spent on rent, the study shows.
“Regional NSW once provided a reservoir of rental affordability when compared to Sydney. Sadly, that’s no longer true,” says Engeler.
Witte says that “long stretches from Tweed Heads to Port Macquarie are now severely unaffordable”.
“Byron Bay, for example, remains one of the least affordable locations in the entire country,” she says.
“It is stark and sobering when regional NSW offers less rental affordability than a global financial centre like Sydney.”
The report found that acceptable to very affordable rents are largely restricted to rural and remote areas with limited services; regional centres like Bathurst, Orange, Tamworth and Dubbo are now moderately unaffordable.
A single person on JobSeeker would need to spend 71% of their benefit on rent while a single pensioner would need to spend 44%.
OTHER CAPITAL CITIES
Hobart’s affordability falling
