Less Than 1pc of Property is Affordable for Low Income Earners


Australia's housing affordability crisis has reached new lows with rental affordability for low-income earners hitting the worst levels in a decade.

Anglicare's annual Rental Affordability Snapshot, which surveyed 69,485 rental listings across the country, has tracked the availability of properties in the private market available for low-income Australians.

The charity's findings have revealed that just 3.2 per cent of the rental listings surveyed were affordable for a couple on the aged pension.

It also found less than 0.5 per cent of properties were affordable for singles on the disability support pension, while virtually no properties were affordable for a single person on Newstart which had been concurrent with each of the past eight years Anglicare has conducted the study.

Only 0.8 per cent of properties were suitable for a single person on the age pension, compared to 1.24 per cent of homes last year.

For most people on a low income, the national benchmark states that rent needs to be no more than 30 per cent of a household budget for it not to cause financial stress and hardship.

Related: Ozcare Lodges Plans for $200m Aged-Care Facility

Affordable and suitable rentals 2012-2019, by payment type

YearAffordable for a person on NewstartAffordable for a couple on the Age PensionAffordable on the Parenting Payment

Housing affordability, which has rated as a top three issue by nearly a third of all voters in recent polls, seems destined to continue in the same vein despite lukewarm election promises.

“Housing in Australia is broken,” Anglicare Australia executive director Kasy Chambers said.

“Our figures show that affordability is down across the board.”

“There is a huge shortage of secure, affordable rentals.”

“That’s causing record levels of rental stress and even homelessness.”

“And now we’re seeing older Australians are getting stuck in expensive and insecure rentals – at a time in their life when they need stability more than ever.”

The report in numbers

• 317 rentals were affordable for a single person on the Disability Support Pension
• 75 rentals were affordable for a single parent with one child on Newstart
• 2 rentals were affordable for a single person in a property or share house on Newstart
• 1 rental was affordable for a single person in a property or share house on Youth Allowance
• 0 rentals were affordable for a single person on Newstart or Youth Allowance in any major city or regional centre

The minimum wage has also not kept pace with the rising cost of living a failure of both the government and the market.

It is understood that an estimated 2.3 million Australians have their pay rate set by an award, and at least 100,000 of all employees are paid at the adult national minimum wage rate.

Anglicare's findings revealed that only two per cent of private rentals are affordable for a person on the minimum wage.

“Single people on the minimum wage with children, for example, will find that only four per cent of rentals are affordable, even with the help of the Family Tax Benefit,” Chambers said.

Related: The Specialist Disability Housing Market and How Developers Can Help

Rental stress for people on government incomes getting Commonwealth Rent Assistance, by payment type, at June 2018

Recipients paying over 30% of income in rent (including rent assistance)Recipients paying over 50% of income in rent (including rent assistance)
Disability Support Pension79,06317,257
Age Pension88,80022,529
Parenting Payment (single)53,8688,955
Parenting Payment (partnered)14,28666,586
Newstart Allowance160,41466,586
Youth Allowance 48,8233,115

The private rental market's failure

Analysis by the Australian Housing and Urban Research Institute shows that governments’ greater reliance on “demand side assistance”, such as rent assistance, has not made renting more affordable.

“Instead, the shortage of affordable rentals for low-income households grew between 1996 and 2011, contradicting the theory that housing would ‘filter’ into low-rent accommodation over time,” Chambers said.

In Australia there are approximately 715,000 people on Newstart in Australia, more than 83,000 receiving Youth Allowance, and 750,000 people receiving the Disability Support Pension.

Anglicare also noted that 660,000 people on the Aged Pension do not own their own home, many of which are renting and living in severe housing stress.

Over 1.34 million Australians currently receive rent assistance, although rent assistance has failed to keep the private rental market affordable.

Nowhere is this more evident than in the growing shortfall in social housing stock as well as the past decade of rising prices has seen the 41 per cent increase in government benefit payments outstripped by the 64 per cent increase in private rental prices.

Solving a problem like a housing crisis?

The number of older Australians living in lower-income rental households is expected to grow by 115 per cent, from 195,000 in 2001 to 419,000 in 2026.

“The solution is simple, but has proven to be stubbornly difficult – government must reclaim responsibility for housing,” Chambers said.

“The most important first step is to tackle the social housing shortfall.”

“Modelling shows that to meet demand, the Federal Government must invest in 300,000 new social and Indigenous-specific rentals, and 200,000 low-cost rentals.”

“Given the abject failure of the private market to provide affordable housing, it is past time for governments to invest in the development of social housing.”

This is the only way that every Australian can have a safe and secure place to call home, Chambers said.

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