Increasing house prices in Australia are putting pressures on renters as rental affordability in Sydney reached a record low.
The latest report from Rental Affordability Index found that despite the stability in some parts of the country, low- and moderate-income households are still largely priced out of all metro markets.
Sydney and Hobart are found to be the most expensive cities for renters while Melbourne and Perth are the most affordable. Sydney renters spend an average of 29 per cent of their household income on accommodation, while those in Hobart spend 28 per cent.
||Per cent of household income
||-3.8 per cent
||-5.4 per cent
||-0.7 per cent
||-0.3 per cent
||-0.1 per cent
||+6.2 per cent
Source: National Shelter, Community Sector Banking, SGS Economics and Planning
“Lots of frustrated renters can’t get into home ownership and they stay in the rental market,” said Adrian Pisarski, executive officer at Australia’s peak housing body National Shelter.
“Those people tend to rent down as low as they can so they can save a deposit to meet the gap in terms of housing purchase, and what that does is displaces lower income households in the rental market.”
The index found that despite the negative conclusions, rental affordability has remained stable in most parts of Australia.
“What we found overall nationally is that rental affordability has not improved, it hasn’t declined overall either, except in Sydney and Hobart, where it is worse than it was six months ago,” Pisarski said.
“For most of the rest of the country [it] is pretty stable, but having said that, rental affordability is very bad across the nation.”
Tenants NSW senior policy officer Ned Crutcher said renters, who made up one-third of households in the state, were largely ignored by the government. “Rents are going up and wages are not. On top of that, renters have very little security of tenancy – they can be kicked out at any time,” he said. “This stuff keeps people awake at night.”