Confirming the pain felt by many people in the private rental market, the latest release of the Rental Affordability Index (RAI) reveals that rents across Western Australia remain unaffordable for many West Australians, in particular for people on low incomes.
Single and Pensioner Couples
Released biannually, the RAI is an indicator of the price of rents relative to household incomes.
The index shows single and pensioners couples face an untenable rental situation. A single pensioner is spending more than 65 per cent on rent while a couple are paying more than 38 per cent, making this group the most impacted by rental affordability. People on JobSeeker are not far behind paying more than 56 per cent of their income on rent.
The high cost of renting leaves many West Australians with few financial resources for the basic necessities such as food, heating or cooling and health care. In the search for more affordable rental homes, people are pushed to the outer fringes of the city away from their families, communities, transport links and opportunities for employment which may lead to increased isolation and disadvantage.
Increase in Rents
“The rental situation is dire and unfortunately this is only going to get worse,” said Michelle Mackenzie CEO of Shelter WA.
“The Real Estate Institute of WA is predicting a 20 per cent increase in rents in March 2021 with the lifting of the moratorium on rental increases and evictions. This coupled with the end of JobKeeper will further exacerbate rental affordability issues. Our members are already seeing the impact of unaffordable rents with increased requests for housing and homelessness services. We face a tsunami of housing insecurity and increased homelessness if we do not act to address rental affordability issues now.”
“We face a tsunami of housing insecurity and increased homelessness if we do not act to address rental affordability issues now.” – Michelle Mackenzie, CEO of Shelter WA.
With over 15,000 people on the waitlist for social housing, and an average wait of over two years, the housing options for people on low incomes are not great. “With the social housing safety net broken, many people have no option but to rent privately, leading to an increase in poverty and housing stress. For those who can’t find an affordable rental the stark reality is living with family or friends, couch surfing or living in cars or on the streets,” said Ms Mackenzie.
COVID-19 has shown the importance of everybody having a safe and secure place to live. This report shows people across Western Australia are facing an increasingly competitive and expensive private rental market. Shelter WA urges the government to reverse this trend and to act now to implement short and long term solutions to address Western Australia’s rental affordability crises.
“New rental assistance options must be put in place along with increased investment into social and affordable housing in partnership with the community housing sector,” said Ms Mackenzie. “Without new investment into much needed social and affordable housing we will continue to create a lottery of housing winners and losers.”
The RAI report shows that rental unaffordability has become so entrenched in many people’s lives, trapping people into a cycle of poverty. Without urgent action the outcome of our State’s housing system failures will be a dramatic increase in homelessness, not only for individuals and families, but for the whole community who will be paying the price of inaction for decades.
The report is released by National Shelter, Community Sector Banking, SGS Economics & Planning and the Brotherhood of St Laurence. Read the full report here.
- Rent is described as unaffordable when households on very low and low incomes spend more than 30 per cent of their income on rent.
- Households paying 30 per cent of income on rent have a RAI score of 100, indicating these households are at the critical threshold level for housing stress. Extremely unaffordable rents occur when the index score is 50 or less, and households spend 60 per cent of their income or more on housing.
- The median rental household in Perth has a gross income of $88,300 per annum and a median score of 145 meaning most householders are pay rents around 21 per cent of total income. These figures remain close to rental stress which is triggered when you spend 30 per cent or more of your income on rent.
- Over 15,000 people are on the waitlist for social housing with an average wait of 2.5 years.
- Over 9,000 people experience homelessness every night across Western Australia.
- There is a shortfall of 39,200 social and affordable homes to meet current housing demand.
For media interviews with Michelle Mackenzie contact Shelter WA via email here. T: (08) 9325 6660.
Shelter WA brings together a strong coalition committed to diverse and affordable housing choice for all, with a particular focus on housing for people on very low to moderate incomes and groups that experience housing insecurity. Shelter WA undertakes research, engagement, policy development and strong advocacy to drive solutions to build an effective housing system and alleviate housing-related poverty. Our vision is that all people living in Western Australia have housing that enables them to thrive.