Rental properties

Shortage of Affordable Rental Properties Rising

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Affordable rental properties, or those with rents of below $350 a week, are dwindling as landlords continue to chase wealthier tenants. This is according to the Australian Housing and Urban Research Institute (AHURI).

While residential lessors have increased in numbers, affordable homes have decreased. AHURI researchers from Swinburne University of Technology and the University of Sydney said property investors are preferring wealthy tenants more and more.

The changes in the supply of affordable rental properties for low-income households are evident from 2011 to 2016. The private rental sector has grown by 17 per cent, which is more than twice the growth of household at 7 per cent.

Yet, the shortage of available rental properties has widened by 12.54 per cent from 2011.

Professor Kath Hulse from Swinburne University said, “Landlords were not supplying enough rentals that are affordable to very low-income households, with 80 per cent living in unaffordable rentals across Australia.”

“Over this period, there was an increase in privately rented dwellings with mid-market rents that were only affordable to middle and higher-income households.

“There was also a rise in proportion of these households in the private rental market.”

Their research shows there is also an affordability issue in Sydney.

Rental Property Changes

In 2016, for the first time in Sydney, affordable homes for low-income households have declined. Whereas, in other major Australian cities, enough supply of affordable rental properties is evident.

“The absolute shortage of dwellings affordable for low-income households in Sydney between 2011 and 2016 is a remarkable change,” said Professor Hulse.

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The professor points out that customised policy development is needed to boost affordable rental properties for low-income households in Sydney.

She further said that their “research suggests that at least 200,000 additional dwellings of a mix of types are needed, based on 2016 figures, requiring a minimum capital program of 20,000 new units a year for 10 years, with a priority given to capital cities and large regional cities with demonstrated shortages.”

The Rental Affordability Index

Their report confirms the result of the Rental Affordability Index released last month. The Index shows that “rental stress” affects the majority of very low-income households in Australia.

Lobby group for low-income households, National Shelter executive officer, Adrian Pisarski said people on Newstart allowance are the most affected as they are forced to look for rental properties outside of the capitals where opportunities for employment are scarce.

“Renting households on incomes below $60,000 per annum have no affordable rentals in our cities, including all capitals and nearly every centre on the east coast. In the WA mining regions, even those earning up to $85,000 face unaffordable rents,” he said.

“Even in cities with higher than average incomes and better than the average rental affordability, the plight of low-income renters continues to deteriorate.”

According to National Shelter, there are more than a million households who are living in rental properties who need housing assistance and that 43 per cent of low-income households experience rental stress.


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