Rents remain unaffordable in Adelaide, with problem prices spreading to more suburbs
Rents remain moderately unaffordable in Adelaide, with median households facing rents at 26% of income, according to the May Rental Affordability Index (RAI).
The RAI is a price index for housing rental markets released biannually by National Shelter, Community Sector Banking and SGS Economics & Planning. It’s an indicator of rental affordability relative to household incomes.
“The latest Rental Affordability Index shows the rental crisis continues. Financial stress, overcrowding and insecurity are the everyday reality of working families,” Ellen Witte, Partner at SGS Economics and Planning said.
Adrian Pisarski, Executive Officer at National Shelter said that while there has been some slight improvement in some capitals, the situation has not improved at all for low income households. “For Households below the median income rental affordability remains a real problem while for households on moderate and low wages and benefits we have a genuine crisis in rental affordability,” Pisarski said.
“The latest RAI shows the serious need for a national housing plan – without action, lower income earners will be forced from our cities and capitals like Sydney will lose vital workers, like those in hospitality,” said Andrew Cairns, CEO of Community Sector Banking.
Conny Lenneberg, Executive Director of the Brotherhood of St Laurence, said the data reflected the struggles of low income renters the Brotherhood worked with in outer suburbs of major cities and regional areas.
This is the first release of the Rental Affordability Index since the Brotherhood of St. Laurence joined SGS Economics & Planning, National Shelter and Community Sector Banking as a sponsor.
“This study shows the depths of the housing crisis facing Australian renters on low incomes,” Lenneberg said. “People are facing deep challenges securing affordable housing in the private rental market, pushed further and further away from the areas from where the jobs are located.’’
“For some vulnerable people who are unemployed, the combination of very low rates of Newstart - as little as $38.98 a day for a single unemployed person - and rising rents for even modest accommodation, is proving unbearable. The consequence is that people are being pushed into homelessness.”
With an RAI of 117 in the December quarter, there has been very little fluctuation in rental affordability in Adelaide in recent months – the score has not changed for six quarters.
However, unaffordable rents have spread to more suburbs north of the city – Wingfield, Parafield Gardens and Para Hills declined from acceptable to moderately unaffordable. Across the Adelaide foothills rents range from moderately unaffordable to unaffordable.
The situation is most dire for those on lower incomes.
A single pensioner faces severely unaffordable rents at 46% of income, while a pensioner couple faces rents at 31% of income, which is deemed unaffordable.
A single person on benefits faces rents at 70% of income, which are extremely unaffordable, while a single part-time worker parent on benefits faces severely unaffordable rents at 40% of income.
Speaking on what could be done to address the crisis, Witte said, “there are opportunities to further streamline development planning processes, but more importantly to invest in social and affordable housing for workers. The use of instruments like the density bonus and inclusionary zoning needs to be maximised.”
National Shelter are also calling for change. “The data demonstrates the need for national leadership and a national housing strategy. We need to bring the threads of tax reform, incentives to encourage greater investment by institutional finance and states, planning reforms and urban and regional development together to tackle this problem,” Pisarski said.
Rental affordability improves in regional South Australia
Regional South Australia continues to see improving rental affordability for median income households. With a RAI of 137, regional SA is at its most affordable since at least mid-2012 when the Index began. Unfortunately for people living on low incomes, there has been no improvement.
An interactive map of the RAI at the small geographical area level can be found at the following website:
About Community Sector Banking
Community Sector Banking is the not-for-profit banking specialist for more than 13,000 organisations; it’s a joint venture between Bendigo Bank and the Community 21 consortium of not-for-profit organisations, established 15 years ago.
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 Brotherhood of St. Laurence
The Brotherhood of St Laurence is a community organisation that works to prevent and alleviate poverty across Australia.