Rental affordability worsens as JobSeeker supplement drops away

The withdrawal of the JobSeeker supplement has left lower-income renting households worse off than before the pandemic, with regional rental affordability made even worse by migrants from city areas, the latest Rental Affordability Index shows.

The annual report, based on private rental market data over the year to June, shows Hobart remains the least affordable city to rent in Australia, with the average household (on a gross annual income of $67,900) paying 34 per cent of that to secure a roof.

But the report, compiled by National Shelter, SGS Economics & Planning, the Brotherhood of St Laurence and Beyond Bank Australia, shows that the biggest changes over the year came from rising prices and the loss of social security blankets that helped many low- to moderate-income people last year.

“Over the past four years, particularly in Perth and Brisbane, but observable everywhere, there had been a bit of improvement in rental affordability, all of which was wiped out in the last year,” said Adrian Pisarski, the executive officer of charity National Shelter.

“Perth’s really plummeted.”

The data to the end of the June quarter – which excludes more recent indications of tightening private rental markets in Sydney and Melbourne – shows that overall rental affordability fared better in the two largest cities, where wages are generally higher.

The loss of income support measures – which meant people were more able to pay off debts and meet healthcare and other costs – had a greater effect on rental affordability in lower-income cities.

The well-documented rush to the regions, which prompted net migration to regional Australia to peak at about 12,000 people per quarter during the pandemic, had had a marked effect on the ability of lower-income people to rent in regional areas, SGS Economics & Planning partner Ellen Witte said.

“This report shows the most marked changes in rental affordability since we first released the RAI in 2015 – especially for JobSeeker recipients and renters in regional areas,” Ms Witte said.

“During the pandemic, many households relocated from capital cities into regional areas – which had a major impact on housing demand, and consequently rental affordability plummeted. Households from capital cities also tend to have higher incomes, pricing the local community out of the market.”

Mr Pisarski said much more social and affordable accommodation needed to be built in regional areas.

Commonwealth Rent Assistance, which topped out at $85 a fortnight, needed to be increased by another $50, and rent rise caps needed to be applied to the private rental market in the case of low-income renters.

he report identifies rental affordability for households on different income bands in different cities.

The most extreme situation was that facing a single person on JobSeeker in Greater Sydney, where average rental costs were equivalent to 110 per cent of their household income.

At the other end of the spectrum were dual-income couples with children, for whom rent in Sydney costs just 14 per cent of income.

Single pensioners and single parents in part-time work were also the hardest hit by increasingly unaffordable rentals, the report shows.

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