Australia’s first ever Rental Affordability Index reveals the depth and extremity of housing stress faced by renters in the current market. Both low income and moderate income households suffer poverty due to high rental costs.
Housing stress occurs when households pay 30% of income or more on rent. Low income households are required to pay around 65% of income on rent to access a tenancy. This means that rents are extremely unaffordable.
The Rental Affordability Index has been created by National Shelter, Community Sector Banking and SGS Economics & Planning. It will be released on a quarterly basis.
Low income households – according to the report – are in a dire situation, single income households are the worst off and rent costs are now locking low and moderate income households out of inner cities. The report gives a blow by blow account of rental affordability in Australia’s major cities.
Media Release 1 October 2015
Peak body National Shelter calls on the mini summit to tackle housing affordability including putting reforms to negative gearing and capital gains tax exemptions, previously ruled out, back on the table.
Executive Officer Adrian Pisarski said “If Prime Minister Turnbull’s mini summit is intent on addressing reform then changing tax settings to reduce house price inflation must be among the issues to be addressed.”
We currently have a tax system which inflates the market by pitting investors against would be owner occupiers for the same properties but providing the wrong incentives around affordable housing according to National Shelter.
“Ultimately renters become the fall guy in house price inflation. Purchasers have low interest rates as a compensation, investors get tax relief, but rents have consistently outstripped inflation and renters have no compensating fallback.
"Housing is the largest single household cost and current settings push people to outer areas away from jobs, education and another opportunities. Low income households then face long commutes, expensive transport costs and experience social and economic exclusion.
"Tax reform can do more to counter the high cost of housing and must be coupled to a new affordable housing supply strategy to improve the economic and social participation of low income households and put a break on rising homelessness.
“If the mini summit is fair dinkum then reforming negative gearing and CGT exemptions must be back on the table despite the Abbott government having ruled them out.” Mr Pisarski concluded.
The peak housing advocacy organisation for low income Australians, National Shelter, today expressed deep concern that neither major party has addressed the greatest cause of financial hardship for very many Australian households – the lack of affordable housing.
“We are half way through the election campaign, and despite repeated calls across the community, neither Labor nor the Coalition have offered any direct affordable housing policies”, said National Shelter Chair, Adam Farrar.“There have been two leaders’ debates; but a deafening silence on one of Australia’s largest policy challenges.”
“We have heard repeated talk of ‘cost of living pressures’ in this campaign. But housing is the largest item of expenditure in the budgets of all Australian households, and low income households pay a third more of their income on housing than high income earners.”
“With rents rising faster than incomes over the past decade, it is hard to take election talk of concern over living costs seriously without policies on housing affordability from either major party.”There is still time for the major parties to announce their housing polices.
National Shelter calls on the major parties to make the following five commitments that would make a real difference to low and moderate income Australians:
Less than a year ago National Shelter released its full housing policy priorities statement, 'Meeting housing challenges'. In that policy National Shelter encouraged all sides of politics to agree to address Australia’s housing challenges and to develop a National Housing Strategy.
At this point in the election campaign, it is time for the parties to take up that challenge.
For the full National Shelter priority statement: Meeting housing challenges (summary)
For more information:
Adam Farrar, Chairperson: 0409 669 936
National Shelter has welcomed the National Housing Supply Council’s report released today, revealing Australian’s unaffordable housing issue continues to grow.