If you live in a rental, this is something you’re probably already painfully aware of.
Renters in every Australian capital city are worse off than before the pandemic, according to the latest Rental Affordability Index report.
Sydney remains the least affordable capital in the country, with a drop of 13 per cent, while Melbourne and Perth each recorded a drop of 10 per cent.
The report, which compares income to median rentsshows that affordability in regional areas has continued to deteriorate.
“The main takeaway is that this is now a national problem,” says Ellen Witte, director and partner at SGS Economics, which produced the report.
“In the past, this was primarily a pressing issue in big cities, but we are now seeing it in all regions.”
According to her, the rural exodus is putting increased pressure on regional areas.
“If 1,000 people leave a big city like Sydney, that’s not much for Sydney,” she says.
“But if those 1,000 people move to a regional city like Orange or Bathurst, they’ll feel that much more urgency, so that’s indeed what we’ve seen.
“The situation is only getting worse because we know that income levels in the regions are lower, so to some extent the regions are in a worse situation than the capitals.”
Queensland region is least affordable
Of all the states, Queensland is now home to the least affordable regional areas, the report said.
“Even among residents who would be priced out of the Greater Brisbane rental market, they would struggle to find affordable rental accommodation in other Queensland cities,” the report said.
The report uses the generally accepted rule for housing stress, which is 30 percent of a household’s income.
The Rental Affordability Index (RAI) uses this benchmark along with average incomes and median rents to produce a score between 50 and 150 as an indicator of how affordable rents are relative to household incomes.
So, the lower the number, the less affordable the area is.
The Sunshine Coast and Gold Coast are rated as “unaffordable to severely unaffordable” in the report, with scores between 51 and 100.
Gayle Fuller, a Gold Coast retiree, says she was going without essential things while in the city’s private rental market.
“You can’t buy everything, you just have to juggle and do your best,” Ms Fuller says.
She paid $500 a week in rent before recently securing public housing after a long and anxious wait.
“It’s getting harder and harder, because things are getting more and more expensive.”
There are huge waiting lists for public housing across the state, and many older people find themselves homeless.
“We have households that are at breaking point,” says Emma Greenhalgh, head of housing advocacy group National Shelter, which contributed to the report.
“You have households that are making very difficult decisions in terms of necessities.”
She says the lack of housing supply contributes to very low vacancy rates, which drives up rents.
“Vacancy rates are very tight and competition is strong, which means landlords can ask for a little more (rent),” she says.
Ms Greenhalgh says demand for housing is so high that some support services are handing out tents.
“I don’t think it will become unusual,” she says.
Housing situation ‘crushes your soul’
Perth was the most affordable capital before the pandemic, but has seen the biggest drop in affordability since then, the report said.
Rents have increased by more than 50 percent over the past three years, while incomes have increased by about 12 percent.
It’s especially difficult for couples like Andrew and Tiffany Jorden, who have been living without their car for a month after struggling to pay off their mortgage.
Nationwide, a single person on JobSeeker now has to spend more than their entire income – or 106 per cent – to rent a median one-bedroom house, the report said.
This figure is up from 89 percent from last year.
Even pooling their JobSeeker income, Mr and Mrs Jorden struggle to find accommodation.
“It’s just overwhelming. It really crushes your soul and makes you feel like you’ll never get back to where you were,” Ms Jorden says.
They applied for dozens of rentals without success, despite being prepared to pay $500 a week of their combined $700 JobSeeker payments, or 71 per cent of their income.
They say finding work is difficult without housing, and finding housing is difficult without work.
“Everything had this ripple effect… one thing makes another thing harder, and then that thing will make another thing harder,” Ms Jorden said.
“Previously we were very positive about it… now we are a month and a half from Christmas.
“Christmas is not at my house this year, unless something miraculous happens.”
Australians need rental help, experts say
Experts say more social and affordable housing is a solution to unaffordable rents, citing the federal government’s $10 billion Housing Australia Future Fund.
But these homes are far away, so additional rental assistance is needed in the short term.
Ms Witte says any program should have limits on rent increases, similar to the system used in the ACT, to prevent landlords from excessively increasing rents and making the situation worse.
“We need to make sure we have some control over the extent of rent increases,” Ms Witte says.
She says a national increase in Commonwealth rental assistance “will provide immediate relief to millions of people”.
Ms Greenhalgh says it is vital that people are not evicted from their rented accommodation.
“It’s these kinds of initiatives that are necessary at the moment to sustain people’s rentals,” she says.
“So that they can stay at home, that they can continue to work, that their children can continue to go to school in their community while this tranche of social and affordable housing is under construction.”
Ms Greenhalgh says wider systemic issues impacting housing, such as capital gains concessions and negative leverage, need to be looked at closely.
“We’re getting to the point where if you own one property, it’s easier to keep acquiring more – you know, get to your third, fourth and fifth property,” she says.
“But there are households who cannot even obtain real estate.
“We have moved so far to an approach to housing focused on wealth creation and the commodification of housing, to the point where we have gone well beyond housing, which is about shelter”