Only 1.6% of private rental properties in Australia are affordable for minimum wage earners and all but zero for those on benefits, Anglicare’s annual snapshot has found.
The Rental Affordability report, released on Thursday, took data from the rental listings on realestate.com.au over a single weekend and assessed whether those properties were affordable – costing no more than 30% of a household budget – for people on low incomes.
The report recommended reforming commonwealth rent assistance (CRA) by raising the rate by 50% – a call that is supported by the Australian Council of Social Service, National Shelter and the Grattan Institute among others – as well as indexing it to average rents by geographic location so it kicks in before rental payments cause serious financial stress.
A Guardian Australia analysis found that soaring rents have dramatically outstripped increases to the CRA payment over the past two years, with house rentals in capital cities rising by an average of 13.8% while rent assistance has risen by a maximum of 4.52%, leaving low-income renters hardest hit by the national rental crisis.
The sample in this year’s snapshot illustrated a substantial squeeze in the market: taken on 19 March, it yielded 45,992 available rentals nationally, down 38% from March 2021, when there were 74,266 listings.
A single person on minimum wage could only afford 720, or 1.6%, of available listings, while a couple on the age pension could only afford 663, or 1.4%, of what was on the market.
For a couple on jobseeker payments with two children, there were only 78 affordable properties nationally, with only two of those in metropolitan areas of Victoria, and none in Sydney.
There were no affordable options for people on youth allowance, and only seven properties – all sharehouses – that were affordable for single people on jobseeker. Only 51 properties – 0.1% – were affordable for people on the disability support pension, and that was without considering whether it would fit any specific needs of an applicant.
“After thirteen years of producing the Rental Affordability Snapshot, it is clear that housing in Australia is broken,” the report said.
“The lack of affordable rentals is hurting households on low incomes across the board. … This year’s results also show how brutal the rental market is for young people on Centrelink payments.”
For Jessica Preston, 19, who lives in Canberra and has been studying early childhood education, the experience of trying to find a place to live has been deeply stressful.
Preston receives youth allowance and works casually in a minimum wage role at an early learning centre. She has been sharing a house with two friends since 30 July last year – a house that took them five months to find.
Even in a sharehouse situation, Preston said her income did not stretch far enough.
“I got my paycheque today and I think I spent the majority of it – it barely covers my rent. At the moment I have a bunch of bills coming in, and it’s all about trying to scramble to pull things together and figuring out how we’re going to make things work this week.”
At one point in her housing search, Preston got stuck and put in an application for emergency housing.
“When they didn’t call me back after one, two weeks, I forgot about it. I got a call six months later saying ‘we’ve got a place for you’. I was like, I really appreciate it but I’ve already got a place. I had to go out there and do things myself,” she said.
“From what I understand they did their very best, but they can only offer what they have to offer. They can’t magically make things appear.”
Preston said she found it difficult to listen to politicians talk about housing because it made her too upset.
“I get too annoyed listening to them. I’ve never cared about politics before but in the last six months or so, I’ve realised what’s really going on. From my experience, what our current government is doing is not enough. I’ve heard Labor in particular talk about making improvements, but I haven’t heard much else,” she said.
“I really think people deserve the dignity of having more than just enough.”
The state of Australia’s rental market was “absolutely appalling”, said Anglicare Australia’s executive director, Kasy Chambers.
“I think many politicians still feel that renting is a transitory living experience. For many people, it’s not. There are more and more Australians renting for longer and longer. It’s an invisible part of housing.
“We really need to be looking at raising payment rates,” said Chambers. She pointed to the experience of the Covid-19 pandemic income support increases. “The cost of those programs didn’t destroy the economy, the sky didn’t fall in.”
The report also recommended building more social housing, addressing tenancy security – “it’s a very one-way contract at the moment”, Chambers said – and fixing the tax system.
“The tax system sees and encourages development and property purchasing as a private wealth generator. So we get individuals buying properties to rent them out. We really have to change that,” Chambers said.
“There’s a vast amount of money that goes into housing from the commonwealth. The private rental market is underpinned by negative gearing, by capital gains tax concessions and by the CRA. The commonwealth has a lot to say in this area already. It’s spending a lot of money and it needs to be spending it wisely.
“But morally speaking, it’s hard as a citizen to participate, to educate your kids, to go to work, if your housing isn’t in place. It’s the most important brick in social welfare. Unless people are actually starving, the next thing they need is housing. When that’s not there, all those other pieces can very easily fall apart.”
Preston said the idea of home ownership was completely off her horizon. She said she was trying to save $50 a fortnight, but “until very recently saving wasn’t even a viable option”.
“I honestly do not feel in our current economy that I will ever be able to afford my own place,” she said. “It’s sad. I always dreamed of growing up and having my own family but I don’t feel like that’s possible now.”
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