#Perth Now » Feed Perth Now » Comments Feed alternate alternate Open Search [perthnow.svg] [news-plus.svg] Personalise your weather Subscribe * News + Breaking News + Western Australia + National + World + Weird + Technology + Opinion + Photos + Community + Weather * Sport + AFL + NRL + Football + Rugby + Golf + Racing + Cricket + Motor + Basketball + US Sports + More * Entertainment + Confidential + Reviews + Photos + Movies + Television + Music + Events + Books + Competitions * Business + Breaking News + Markets + Economy + Work + Small Business + Companies * Lifestyle + Realestate + Money + Parenting + Health + STM + Food + Home & Garden + Fashion + Travel + Caravan and Camping * Video + Latest News + Sport + Entertainment + Business + Lifestyle + Travel + Tech * Classifieds + Place an Ad Use keywords to search content on this website ____________________ (Submit) Search Use keywords to search content on this website Housing stress is rising up the income ladder according to industry report June 15, 2016 3:10pm Kirsten Craze Greater Sydney is the least affordable city in Australia with an Rental Affordability Index ranking of 109. Picture: Destination NSW/Hamilton Lund Greater Sydney is the least affordable city in Australia with an Rental Affordability Index ranking of 109. Picture: Destination NSW/Hamilton Lund Australia’s rental “unaffordability crisis” is spreading up the income ladder. The latest Rental Affordability Index (RAI) report out today has revealed that low-income households typically need to pay between 50 per cent and a whopping 85 per cent of their income on rent. Industry experts have long maintained that a household is actually in “housing stress” when more than 30 per cent of the total income is spent on rent. Compiled by peak advocacy group National Shelter, not-for-profit banking specialist Community Sector Banking and planning and economics firm SGS Economics & Planning, the RAI data is based on figures from both the September and December 2015 quarters as well as historical data dating back to 1996. The RAI is a price index that compares the level of rent a household pays to the total income being brought in. The study works on the basis that an RAI figure of 100 is where rent represents 30 per cent of income. The higher the number, the lower the level of housing stress. Unsurprisingly, Sydney was ranked as the least affordable city in Australia with an RAI of 109. Adrian Pisarski, executive officer of National Shelter, said the latest index highlights that struggling couples and families are falling below the poverty line and as a result are being pushed onto the suburban fringes due to high rents. “Australia’s lowest income households — those on around $500 a week — are paying up to 85 per cent of their income on rents. Middle-income households are also falling into housing stress as high rents chew up incomes that aren’t keeping pace with rising housing costs. It is clear that rental unaffordability is dividing Australia,” Mr Pisarski said. “Low and moderate income households are being forced out of inner-city areas into fringe suburbs where there are fewer jobs, less infrastructure such as transport, and fewer opportunities, which is only entrenching their disadvantage. Essential service workers like teachers, nurses and police are also being affected, potentially leaving service gaps in the suburbs they’re being priced out of,” he said. A GROWING CONCERN Ellen Witte, an associate at SGS Economics & Planning, said rental unaffordability had started to intensify from the early 2000s in Queensland and NSW. “This coincided with the 50 per cent reduction in the capital gains tax in 1999 and the fact that for the first time in decades, new housing stock was falling behind demand. This resulted in a surge of investment in housing, driving up prices, and pushing out first home buyers, forcing them to rent,” she said. Ms Witte said the percentage of Australian households that rent has grown to 35 per cent across Australia, with many of those groups struggling to make ends meet. “Single income households are the worst off and the trend over the last five years has mostly seen no improvement, except in Perth, where the mining downturn is likely to have taken the heat out of rents,” she said. After analysing historical housing trends between 1996 and 2011, Ms Witte said rental affordability had deteriorated dramatically across NSW and Queensland. “The decline in rental affordability is expected to follow similar trends in other states,” she said. “Long-term trends in most cities present a pessimistic outlook for rental affordability. More young Australians are being squeezed out of the owner-occupier property market due to high housing costs, and this is driving up demand and prices for rental accommodation, exacerbating the rental accommodation shortage,” Ms Witte said. WAKE UP CALL NEEDED Andrew Cairns, CEO of Community Sector Banking, which helped fund the report, said the nation had to “wake up” to the rental crisis. “There is a dire need for innovative financial models to support more affordable housing and we’re calling on governments, companies and philanthropists to collectively use their power to create sustainable solutions now,” he said. “$10 billion in funding would deliver 30,000 to 40,000 more homes and go some way to addressing this crisis,” he said. Mr Pisarski agreed that governments should be taking action to alleviate the rental crisis. “We need a national strategy to address the deterioration of rental stress but what we are getting is the opposite. Government cuts over the past five years, including cuts to the National Rental Affordability Scheme (NRAS), have only contributed to the current rental crisis,” he said. “We need concrete action from all governments in partnership with the community sector to alleviate this rental affordability problem,” he said. CITY BY CITY BREAKDOWN SYDNEY — Greater Sydney is the least affordable city in Australia with an RAI of 109 — Affordability levels have stabilised in Sydney in recent years — Inner city areas have shown “no relief” for average households, however some western suburbs have experienced “slight improvements” in affordability. BRISBANE — An RAI of 116, affordability in Brisbane has decreased over the past two years — During the past two years, household income has dropped by 0.2 per cent, while overall rents have increased by 2.5 per cent — Brisbane’s inner city, some suburbs south of the Brisbane River and East Brisbane have experienced improvements in rental affordability due to a growth in apartment supply PERTH — Greater Perth, with its RAI of 126 has “acceptable” rents. That’s a big change from a “moderately unaffordable” score of 108 in December 2013 — The increased affordability has been even more significant in regional Western Australia compared to Perth itself in part due to the mining downturn ADELAIDE — Adelaide’s RAI clocked in at 117, meaning rents were “moderately unaffordable” in the South Australian capital. In two years the RAI score rose by 3 points — The positive result is due to household incomes rising faster than rents. In three years, household income rose 7.5 per cent while Adelaide rents rose only 1.7 per cent — Some suburbs in Adelaide’s south have become less affordable, while some northern suburbs have become more affordable since the last release HOBART — In Hobart the RAI came in at 111, which places the Tasmanian capital in the “moderately unaffordable” category. – Surprisingly, after Sydney, Hobart is the country’s least affordable city due to relatively lower incomes and high rents. — Pockets at the fringes of Greater Hobart have become more affordable. * Recent data from Melbourne, Darwin and Canberra could not be provided for the study More Local News Sydney Symphony Orchestra: David Bowie Nothing Has Changed Legend honoured Stars pay tribute to Bowie with WASO Portrait of a little boy dressed up as halloween vampire. The boy is aged 6 and is making scary face at the camera. Hocus pocus Frightfully good Halloween events in Perth Generic image of a child looking at a tablet or iPad. 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