Rental market going from bad to worse

With the discouraging words, ‘Every year it’s worse again’, Ellen Witte, principal and partner at SGS Economics and Planning, introduced the ninth annual, Rental Affordability Index, launched on 14 November at Parliament House, Canberra under the mantle of the Parliamentary Friends of Housing.

As the report makes clear, ‘it’ is the state of the Australian rental market, characterised by an outright lack of properties, now including regional areas as well as urban centres, along with rental rates that are either out of the reach of many people, notably those relying on government support payments, or at levels that cause significant household stress.

Staff representatives from the St Vincent de Paul Society National Secretariate attended the launch, including CEO Toby oConnor who is a National Shelter board member. The Society’s National President, Mark Gaetani, has joined a range of charities and social sector organisations in expressing deep concern about the availability and affordability of the nation’s rental properties.

‘This crisis has been going on for much too long and it is getting worse, Mr Gaetani said, adding that the report gives a series of valuable, interactive snapshots of the rental situation right across the country.

‘The most visible impact of a lack of secure rental housing is the high number of people experiencing homelessness, currently at a record level of over 122,000 on any given night,’ he said.

‘On top of that are the many “hidden homeless”, along with the vast number of Australians living in poverty who forego paying for other essentials, including food, in order to cover their rent. Currently, some 3.3 million people are living below the poverty line, including 761,000 children. Our members working on the frontline tell us that many of these folk are sacrificing meals and utility bills in order to cover their rents.

‘Over the past year we have recorded a growing demand for emergency relief services, many of them first-time callers. The great majority were renters in low-income households.

‘The first priority is to have a roof over your head and ensuring that this happens should also be the number one priority for the Australian Government. Having access to decent housing is a basic human right that a wealthy nation like ours can afford and should deliver.

‘Rental housing should be more than an investment opportunity for those who can afford it. For this reason, we support tax reform that would see a reduction of the Capital Gains Tax discount.’

The report showed that rental affordability is hitting all-time lows, including cities and regional areas, with few exceptions. The situation has been made worse by rent rises coming at a time of stagnant incomes, which in many cases have gone backwards because of inflation.

Availability is another issue, with some areas having one per cent or less of properties available on the rental market.

‘A well-functioning home market would have at least a three per cent vacancy rate,’ Ellen Witte said, making a connection between the lack of properties and rising rents, which also impact on inflation, the targeted enemy of the Reserve Bank of Australia, and in turn, the Australian Government.

Mr Gaetani noted that people on income support are being particularly hard hit, adding, ‘The report highlights how a single person on JobSeeker must spend more than 75 per cent of their income to rent a one-bedroom apartment in any capital city. Living in a regional or rural area is no longer a solution either, as rents have skyrocketed and there’s almost no vacant property.’

Mr Gaetani said a range of workable solutions to the rental crisis had been identified by the Government and the Society is urging that they be implemented urgently.

‘These include increasing social housing stock in accordance with the National Housing and Homelessness Plan and progressing minimum national rental standards such as limiting rent increases, ending no-grounds evictions and addressing energy efficiency for rental stock.

‘It is also vital that people relying on support payments are better able to cover their expenses. This is why the Society continues to advocate for increasing the rates of JobSeeker, Commonwealth Rent Assistance and other related payments.

‘Addressing the rental crisis should be done holistically. There are many facets, each of which needs to be tackled in a determined way in order to deliver housing justice across the country.’

Read The Record Summer 2023 edition