Media Release: Rental Affordability Worsens as Adelaide Overtakes Sydney as the Second Least Affordable Capital City in the Country
Adelaide has now overtaken Sydney as the second least affordable capital city, as incomes in Greater Adelaide have failed to keep pace with rising rents.
The latest release of the Rental Affordability Index (RAI) has found that Greater Adelaide now only trails Hobart as the least affordable capital city in the country. This is largely due to the slow income growth compared to other capital cities and rising rents.
The geographic spread of affordability in Greater Adelaide has increased, with almost all of the inner and middle suburbs and foothills now moderately unaffordable to unaffordable. Many of the north-eastern suburbs, such as Salisbury Heights and Golden Grove are now moderately unaffordable.
Rents in Adelaide remain particularly unaffordable to lower income households:
- Single person on Newstart Allowance: 77 percent of income (extremely unaffordable)
- Single pensioner on benefits: 50 per cent of income (severely unaffordable)
- Couple pensioner on benefits: 34 percent of income (unaffordable)
- Single part-time worker parent on benefits: 41 percent of income (severely unaffordable)
In country South Australia, rents have also become harder to afford for low-income households, including those on Newstart.
With a RAI of 134, affordability in regional SA has continued to fall and is at its least affordable since early 2016. The average household needing to rent faces rents of about 22 per cent of their income.
Fast-growing outer areas including Mt Barker, Lobethal and Strathalbyn continue to have moderately unaffordable rents, verging on the threshold of unaffordable. Areas more than 40km north of Adelaide’s centre, from Two Wells to Dublin and Wildhorse Plains rents are seeing unaffordable rents.
Adelaide rents extremely unaffordable for people on Newstart
Conny Lenneberg, Executive Director of the Brotherhood of St Laurence, said: “With high rents, single older job seekers and families with young children are in the eye of the affordable housing storm across Adelaide. We are seeing increasing disparities, and the crisis end of this challenge is visible on our streets.”
“In our rich country, how can it be that some renters on the unemployment payment are now being forced to choose between basics like heating or putting food on the table, and others sleep in their cars?
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.”
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 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.”
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.”
The RAI is an indicator of the price of rents in a particular market 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 on the RAI shows that households would be required to spend at least 30 per cent of their income on rent. They may experience difficulty paying for primary needs such as food, medicine and transport. A score of 100-120 shows that households are facing moderately unaffordable rents.
With a score of 112, the average income household in Greater Adelaide faces rents at around 27 per cent of their income. While the RAI for Adelaide had remained stable over 2016 to 2018, the last four quarters have seen a notable decline.
MEDIA: For further information and interviews please contact
Andrew Blyberg on 0401 691 666 or [email protected]
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:
https://www.sgsep.com.au/projects/rental-affordability-index
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.
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