Rents remain unaffordable for low income households in Perth, despite continued record improvement trend in affordability

Rents remain unaffordable for people on low incomes in Perth, despite a continued record improving trend in affordability, according to the May Rental Affordability Index (RAI).

The RAI is a price index for housing rental markets released biannually by National Shelter, Community Sector Banking and SGS Economics & Planning. It’s an indicator of rental affordability relative to household incomes.

“The latest Rental Affordability Index shows the rental crisis continues. Financial stress, overcrowding and insecurity are the everyday reality of working families,” Ellen Witte, Partner at SGS Economics and Planning said.

Adrian Pisarski, Executive Officer at National Shelter said that while there has been some slight improvement in some capitals, the situation has not improved at all for low income households. “For Households below the median income rental affordability remains a real problem while for households on moderate and low wages and benefits we have a genuine crisis in rental affordability,” Mr Pisarski said.

“The latest RAI shows the serious need for a national housing plan – without action, lower income earners will be forced from our cities and capitals like Sydney will lose vital workers, like those in hospitality,” said Andrew Cairns, CEO of Community Sector Banking.

Conny Lenneberg, Executive Director of the Brotherhood of St Laurence, said the data reflected the struggles of low income renters the Brotherhood worked with in outer suburbs of major cities and regional areas.

This is the first release of the Rental Affordability Index since the Brotherhood of St. Laurence joined SGS Economics & Planning, National Shelter and Community Sector Banking as a sponsor.

“This study shows the depths of the housing crisis facing Australian renters on low incomes,” Lenneberg said. “People are facing deep challenges securing affordable housing in the private rental market, pushed further and further away from the areas from where the jobs are located.’’

“For some vulnerable people who are unemployed, the combination of very low rates of Newstart -  as little as $38.98 a day for a single unemployed person - and rising rents for even modest accommodation, is proving unbearable. The consequence is that people are being pushed into homelessness.”

With an RAI of 145 in the December quarter, the latest report shows a continued record improving trend in rental affordability in Perth – the median household faces rents at 21% of total income, which is considered acceptable.

Despite the continued improvement, rents remain unaffordable for lower income households. A single part-time worker parent on benefits faces rents at 46% of income, which is severely unaffordable.

The spread of affordability across greater Perth is also uneven. Some inner-city areas  are moderately unaffordable to unaffordable, while areas along the coast, including North Fremantle and Claremont remain unaffordable.

Speaking on what could be done to address the crisis, Witte said, “there are opportunities to further streamline development planning processes, but more importantly to invest in social and affordable housing for workers. The use of instruments like the density bonus and inclusionary zoning needs to be maximised.”

National Shelter are also calling for change. “The data demonstrates the need for national leadership and a national housing strategy. We need to bring the threads of tax reform, incentives to encourage greater investment by institutional finance and states, planning reforms and urban and regional development together to tackle this problem,” Pisarski said.

Rental affordability declines in regional Western Australia

Rental affordability has declined in regional Western Australia, which recorded an RAI of 153 in the December quarter of 2017.

While the region has seen improving affordability over recent years, fluctuations across 2017 suggest that the improvement may be plateauing. The June quarter of 2017 saw the first minor decline in rental affordability in regional WA since the same quarter of 2014.

Media Contact: Michelle Mackenzie, CEO, Shelter WA.(08) 9325 6660 or 0419 931 819