Rent report says less than 1% are affordable for minimum-wage workers

May 5, 2023
About 0.4% of rental properties are affordable for someone on the Age Pension and only 0.1% for those on the Disability Support Pension. Image: Green Left

As the rental crisis worsens, a new report by Anglicare Australia has revealed some shocking statistics. Less than 1% of private rentals are affordable for a person working full-time on the minimum wage, and there are even fewer for people on welfare payments.

The Rental Affordability Snapshot 2023 surveyed more than 45,000 rental properties across the country and found that rents “have never been less affordable”.

Rents have risen an average of 11% over the past year.

“Each year, we think the market couldn’t get any worse. And each year, we’re shocked to see that it can,” Anglicare Australia Executive Director Kasy Chambers said.

“This year’s result is the worst we have ever seen for a person on the minimum wage,” she said. “If full-time wage earners are doing it tough, then people on Centrelink payments don’t stand a chance.”

The report also highlighted that the more than 1 million underemployed people and workers in insecure work would face further difficulties.

Indeed, the report found just four rentals that are affordable for people on JobSeeker across the whole country. It found no affordable rentals for students on Youth Allowance.

Around 0.4% were affordable for someone on the Age Pension and only 0.1% for those on the Disability Support Pension.

These figures include the additional rent assistance supplement, which maxes out at a paltry $157.20 a fortnight for a single person.

Vacancy rates have hit record lows of 0.8%, with “dozens or even hundreds of renters” competing for available properties.

“Such dire results have a real impact on people’s lives,” the report said. People are already skipping meals, foregoing essentials and accessing payday loans to get by.

The report found that wages and welfare payments are slipping far behind housing costs, and suggested raising the rate of JobSeeker and other payments as an essential part of solving the rental crisis.

“Poverty and housing are inextricably linked because housing is the largest fixed cost for most low-income Australian households,” the report said. “Yet JobSeeker and related payments are now so low that they trap people in poverty.

“By far, the most important change that could be made for renters on income support is to raise the rate of Centrelink payments above the poverty line.”

The report also pointed out that housing supply is not the main issue, with between 165,000 to 240,000 new dwellings built each year.

“Increasing supply in the private market has simply failed to make housing more affordable. Australia now has more dwellings per head of population than at any other time in our history.

“The undersupply is not in housing, but in social and affordable housing,” the report said.

Social housing is an umbrella term that includes NGO and charity-run community and public housing: only the latter is managed by government.

Housing activists say community housing is “privatisation by stealth” and that more public housing is a big part of the solution to the crisis.

Australia has a shortfall of at least 640,000 social homes, the report said, and to simply maintain the current ratio of social housing will require building 15,000 social dwellings a year.

Labor’s current housing plan will fund just 20,000 dwellings over the first five years — far from enough to solve the crisis. The report suggests a minimum of 25,000 new social homes every year for 20 years.

The report called for more protection for renters, including making renters’ rights consistent across states.

It suggested ending “no-grounds” evictions, restricting rent rises, enforcing minimum standards for heating, cooling and energy efficiency and putting the onus on landlords, not tenants, to keep up to date with repairs.

It suggested scrapping unfair tax concessions and cited Anglicare Australia’s A Costly Choice report that found about $130 billion is given away in tax concessions for property owners, including $40 billion for capital gains tax.

Nearly 60% of these concessions went to the richest 20%, with just 3% going to the poorest. Tax concessions “drive up rents and house prices” while “costing billions … that would be much better spent delivering more affordable rental housing”, the report said.

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