Fears COVID-19 will hurt Aussie families already struggling to pay rent

Experts hope the coronavirus pandemic will convince policymakers to take drastic housing action       

Working families with average incomes often struggled to pay rent long before the devastating impact of COVID-19, new research shows.

A report from Compass Housing Services found that prior to the pandemic, typical renting households in Sydney, Melbourne, Adelaide, Brisbane and Hobart earned thousands of dollars a year less than what’s needed to avoid housing stress on an average home.   

Although affordability gaps were most prevalent in the inner suburbs of capital cities, the report – prepared mainly between September 2019 and January 2020 – found renters in many regional towns also struggled due to having lower median incomes.

Report author Martin Kennedy said the research dispelled the myth that housing stress was just something experienced by people on low incomes.

“Even before the current crisis working families with average incomes often struggled to rent suitable properties close to jobs,” Kennedy said.

“Throw in the possibility of reduced hours or a job loss due to COVID-19 and things can become very tough indeed.  

“Although rents are expected to fall in the short term due to more stock coming on to the market, they may not fall far enough to become affordable for typical renting households.”

The report noted that in some areas, rents would need to drop by up to 50 per cent to become affordable, and that assumed people were able to sustain their current income levels.

Researchers did not find a single inner or middle Melbourne suburb where the median rent on a detached three or four bedroom house was affordable for the typical renting household.

This was similarly the case in Sydney, except in Canterbury-Bankstown, Cumberland and Ryde, where median rents for a three-bedroom home were affordable.

Hobart also had some of the least affordable rental housing in the country, with no local government areas affordable for typical renting households wanting detached housing. 

Kennedy said these findings formed part of a broader housing crisis.

“The problems facing renters are largely due to purchase prices being too high and social housing supply being too low,” he said. 

“Unfortunately, people who can’t afford to buy, and don’t qualify for social housing, have no option but to cut back elsewhere and try to manage as best they can.”

This research builds on findings from this year’s Anglicare Rental Affordability Index, which revealed less than 2 per cent of Australian rentals were affordable for people on the JobSeeker Payment, even with the coronavirus supplement.

To remedy the crisis, the report calls for 500,000 social and affordable housing properties to be built in the next 10 years, and says renters should be given more protection under state and territory tenancy laws.

The report warned that action was especially critical given the ongoing COVID-19 crisis.

“If there is a silver lining it is that crises have a unique ability to focus the mind, and by striking at the ability of middle Australia to keep the roof over its head, COVID-19 may be the thing that convinces policymakers that seeing to the housing security of their citizens is of paramount importance,” the report said.