Renting has become less affordable in every Australian city in 2022 compared to this time last year, a new rental affordability report has confirmed, but the least affordable city for renting may surprise you.
The Annual Rental Affordability report published by SGS Economics and Planning and National Shelter on Tuesday found Hobart — no, not Sydney — was Australia’s least-affordable city to be a renter in 2022.
Both Hobart and Brisbane broke records this year for the least affordable they’ve ever been, as did regional areas in Tassie, Victoria, Queensland and NSW, while Perth hit a six-year low.
Now, you may be thinking, hang on, rents have only been going up so shouldn’t everywhere be breaking records? Well no, “rental affordability” is not how expensive rents are, but how much rent costs in relation to income, and we know wages are painfully stagnant.
For example, the average annual income for Greater Sydney residents in the second quarter of the 2022 financial year was $115,000, one of the highest in the country. But rental properties in the majority of local government areas across the city were still classified as either moderately unaffordable, unaffordable, severely unaffordable or, in one northern LGA, Seaforth, extremely unaffordable.
The reason rent is so borked right now, aside from the fact that all landlords are scum (sorry, I mean *the system* that allows landlords is scum — I’m sure your uncle’s a very nice person) is basically supply and demand.
The national rental vacancy rate has dropped month on month this year and reached record lows, the likes of which experts have never even seen before.
Chief of Research and Economics for Domain Dr Nicola Powell told
“No one can keep up with that level of price growth,” Powell said.
“The escalation in property prices during the pandemic has locked people into the rental market for longer because of their inability to break into the housing market.”
National Association of Tenants Organisations spokesperson Leo Patterson Ross told the ABC we’re not living “in normal times”.
“We’re really going back to times like the Great Depression to find comparable points in Australian history of when it was so tough to be a renter in Australia,” he said.
“We’re seeing prices set [according to] people’s desperation for a home. That means people are overpaying and that price is being leveraged. That’s not a sound way to run any market, but it’s particularly bad to put it into an essential service market.”
The rental affordability report also identified that Australia’s housing market had become too investor-friendly when housing should just be a universal human right. Capitalists find ways to capitalise on everything.
The report said incentives like capital gains tax discounts and negative gearing trapped renters in a cycle of unaffordability where they could never save enough to break out and buy their own home.
In its first federal budget, the Labor Government promised to build a million homes over five years to help ease the pressure on housing and rental markets. But it’s only actually going to build 10,000 homes — the remaining 990,000 will be built by private investors, incentivised by the government. Plus, one million homes built in five years is Australia’s current rate of development. In the last five years, 985,085 were built.
What we need is one million public and social homes to get people with acute financial needs off decade-long waiting lists for a place to live.
@pedestriantv Labor said in its Federal Budget one million new homes built over five uears would help fix Australia’s housing crisis… it won’t. #auspol #aussie #housingmarket #budget #ptv ♬ original sound – PEDESTRIAN.TV
So how bad does it need to get before governments take meaningful action? I don’t want to know.