Rental affordability in Perth has stabilised but rents are not affordable across the board and renting in Perth remains unaffordable for lower-income households, including those on Newstart, the latest release of the Rental Affordability Index (RAI) reveals.
With a score of 143, rental affordability in Greater Perth has remained stable. The median rental household in Greater Perth faces rents costing about 21 per cent of their total income. While this is considered acceptable, rental property remains much less affordable for lower-income households:
- Single person on Newstart: 100 per cent of income (extremely unaffordable)
- Single pensioner on benefits: 65 per cent of income (extremely unaffordable)
- Couple pensioner on benefits: 38 per cent of income (unaffordable)
- Single part-time worker parent on benefits: 46 per cent of income (severely unaffordable)
- Full-time hospitality worker: 31 per cent of income (unaffordable)
Perth is unaffordable for pensioners, with pensioner couples paying 38 per cent of their income on rent and single pensioners forking out 65 per cent. Singles in particular could be forced to go without medical care or other fundamental needs to make ends meet. This is well over the stress threshold of 30 per cent, when people experience difficulty paying for primary needs, such as food, medicine and transport.
People on Newstart are spending 100 per cent of their income on rent, leaving little to no money for necessities such as food, medical care and other needs. This extremely unaffordable market is pushing people on Newstart further away from the city, limiting access to opportunities for employment.
James Barron, Head of Relations at Community Sector Banking, said: “Looking beneath the headline figures, rental stress is affecting the majority of very low-income households in Australia.
“People on Newstart are being hit particularly hard. Even in cities with higher than average incomes and better than average rental affordability, the plight of low-income renters continues to deteriorate.”
Adrian Pisarski, Executive Officer, National Shelter, said: “There is not one place in Australia where a Newstart recipient can rent affordably.
“Newstart renters in metro Sydney require 4.5 times their current income to achieve affordability. The most affordable places we have are in regional SA and even there someone on Newstart needs to pay 47% of their income to rent.
“The RAI evidence is conclusive: all Newstart recipients who are renting are living in poverty. The situation is only marginally better for single and dual pensioners who also face unaffordable rents everywhere in Australia.
“The implications for retirement incomes policy are dire with more people retiring without owning and facing a completely unaffordable rental market. We know older women are the fastest growing cohort experiencing homelessness and we’d expect increased rates of homelessness among older people based on these findings,” Mr Pisarski said.
Ellen Witte, Partner at SGS Economics and Planning said: “People on Newstart are the most vulnerable cohort in the country as they experience the worst levels of housing stress. Required to pay 77 per cent of income or more on rent in cities, these households are pushed to the outer fringes with poor connections to jobs and education.
“After paying the rent there are not enough resources left, and people may not even be able to fork out money to go to a job interview. There is an urgent need to raise the Newstart allowance and provide these households a pathway out of the poverty trap.”
Conny Lenneberg, Executive Director of the Brotherhood of St Laurence, said: “The evidence is utterly compelling: the deeply inadequate Newstart rate is a driver of homelessness. This is not the ‘fair-go’ society we cherish.”
“With high rents, single older job seekers and families with young children are in the eye of the affordable housing storm across the country. We are seeing increasing disparities, and the crisis end of this challenge is visible on our streets.”
Ms Lenneberg said there was also an urgent need to increase subsidised social housing. “Our social security safety net is letting down fellow citizens. There is an urgent need to raise Newstart and its very modest rental supplement and to increase subsidised social housing.”
Higher incomes help in country WA
In most states, people living in the capital city and renting earn more than their country counterparts, but not so in WA. The median rental household in Greater Perth has a gross income of $85,900 per annum while the median rental household in regional Western Australia has a gross income of $91,800 per annum.
In terms of rental affordability, regional WA has a score of 157 on the RAI. Affordability in regional WA has grown steadily in recent years but fluctuations from 2017-2019, suggest the growth in affordability has plateaued. The average household seeking to rent in regional WA would be facing rent levels at around 19 per cent of its income, which is considered to be acceptable.
However, Mr Pisarski said that higher average incomes made it even more unaffordable for low income households. “In the WA mining regions, even those earning up to $85,000 face unaffordable rentals.”
The RAI is an indicator of the price of rents relative to household incomes based on new rental agreements. It is released annually by National Shelter, Community Sector Banking, SGS Economics & Planning and the Brotherhood of St Laurence.
A score of 100 and below in the RAI shows that low-income households are suffering rental stress, spending at least 30 per cent of their income on housing. They may experience difficulty paying for primary needs such as food, medicine and transport. A score of 100-150 shows that low-income households are facing unaffordable rents.
MEDIA: Andrew Blyberg on 0401 691 666 or email@example.com
Interview opportunities are available with:
- Adrian Pisarski, Executive Officer of National Shelter
- Ellen Witte, Partner at SGS Economics and Planning
- James Barron, Head of Relations, Community Sector Banking
- Conny Lenneberg, Executive Director of the Brotherhood of St Laurence
Link to interactive map:
About the Rental Affordability Index
National Shelter, Community Sector Banking, SGS Economics & Planning and the Brotherhood of St Laurence have released the Rental Affordability Index (RAI) biannually since 2015. The RAI is an easy to understand indicator of the price of rents relative to household incomes.
About National Shelter
National Shelter is a peak advocacy group whose mission is to create a "more just housing system, particularly for low-income Australian households".
About SGS Economics & Planning
SGS Economics & Planning is a leading planning and economics firm whose purpose is to shape policy and investment decisions to achieve sustainable places, communities and economies.
About Community Sector Banking
Community Sector Banking is the not-for-profit banking specialist for more than 17,000 organisations; it’s a joint venture between Bendigo Bank and the Community 21 consortium of not-for-profit organisations.
About Brotherhood of St Laurence
The Brotherhood of St Laurence is a community organisation that works to prevent and alleviate poverty across Australia.