“Together with historically low vacancy rates and little sign that tight rental market conditions will ease in the near term,this is expected to keep rent inflation elevated for some time,” the RBA said in Friday’s statement on monetary policy.
Rental inflation neared 8 per cent in the year to September and was expected to increase further,the RBA said.
Rental affordability in Sydney.Credit:SGS Economics,National Shelter
A household is considered to be in housing stress once housing costs are greater than 30 per cent of its total income.
The Rental Affordability Index found Sydney had become the least affordable capital city alongside Hobart in the 12 months to June 30,as median rents rose by $100 to $650 a week,costing 29 per cent of the average renter household’s income.
No coastal Sydney suburbs had acceptable rental affordability,it found,and inner-city locales were either unaffordable or extremely unaffordable. The average household needed to travel at least 15 kilometres from the CBD to suburbs such as Campsie,Lakemba,Rosehill or Parramatta to find acceptable rents.
SGS Economics&Planning principal Ellen Witte said this was a deep economic problem.
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“Key workers in critical industries are travelling further and further and being priced out of their city,” she said. “We need a serious plan to provide the right housing at the right price to people who really need it.”
In Melbourne,rental affordability had dropped to 2018 levels,the report found. While an average rental property cost 24 per cent of an average income,which is considered affordable,Witte said affordable pockets were disappearing.
“An entire corridor,stretching from Footscray in the inner west,north to Meadow Heights,was considered ‘affordable’ to the average rental household just last year,” she said.
“As of the June 2023 quarter,those options that cost less than 15 per cent of a household’s gross income had all but vanished.”
Rental affordability in Brisbane.Credit:SGS Economics,National Shelter
Brisbane’s rental affordability had fallen to its lowest-ever level,the report said,with the median rent ($553 a week) now costing 28 per cent of an average renting household’s income.
Regional Queensland was the most unaffordable of all regions and capital cities,with median rents (also $553 a week) costing 30 per cent of average incomes.
Housing Minister Julie Collins said the government was focused on improving housing supply,which would improve housing affordability for both renters and buyers.
She pointed to the government’s Housing Australia Future Fund,which will help build social and affordable rental projects,its work securing a state and territory agreement to harmonise renters’ rights and a 15 per cent increase in the maximum rate of Commonwealth rent assistance.
“We’ll continue to work closely with state and territories as well as the sector to ensure more Australians have a safe and affordable place to call home,” Collins said.
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