No Ease Up On Rental Stress

A new report from the Council Of Australian Governments (COAG) Reform Council has shown that rental stress continues to be an issue for low income Australians, with more than three in every five of the lowest income renting households paying more than 30 per cent of their income on rent.

Not for Profit organisation Mission Australia who advocates for disadvantaged Australians has called the results of the report that shows a deterioration in affordability of rental accommodation “alarming”.

“What is eye-opening is the enormity of the rental affordability problem when captured in black and white, particularly in our major capital cities,” a spokesperson for Mission Australia Eleri Morgan-Thomas said.

“To have people who can least afford it experience a 12 per cent increase in housing stress in the space of a couple of years is extremely alarming.”

The data from the COAG Reform Council in its report Affordable Housing 2010-11: Comparing performance across Australia shows:

• nationally, rental stress increased significantly for the lowest income households (by 12%) and low income households (by 7 per cent) between 07-08 and 09-10
• 42 per cent of low income households (the lowest 40 per cent by income) were in rental stress in 2009-10 up from 37 per cent in 07-08
• the proportion of low income households in capital cities in rental stress increased from 38 per cent to 45 per cent between 07-08 and 09-10
• the rate of rental stress for low income households in NSW and Qld was higher than the national rate

“The shortage of affordable housing in our capital cities means more people on middle incomes ‘camp’ in the rental market as they save enough money to buy their own home,” Morgan-Thomas said.

“Fewer rental vacancies mean less opportunity for people on low incomes to find adequate and sustainable housing.”

According to Mission Australia there are a number of measures that could increase rental affordability for low income earners:

• a substantial increase in social housing for those most vulnerable
• continuation and expansion of the successful National Rental Affordability Scheme to finance affordable rental properties for low income workers
• accessing new forms of capital such as social investment bonds to finance affordable rental housing and shifting away from negative gearing
• keeping house price inflation at no more than CPI

“Following on from data released earlier this month which showed a national shortage of 230,000 dwellings against demand, the figures display the enormity of the challenge facing us.”