'I’m never going to afford a house': on the frontline of Sydney's rental affordability crisis

Extract from The Guardian

As prices in Australia’s biggest city surge, prospective tenants survey their options while resigning themselves to a life off the property ladder

Sandra and her daughter Eliza inspect a $640-a-week house on Kepos Street in Redfern. Photograph: Naaman Zhou for the Guardian

Naaman Zhou

Monday 8 May 2017 06.18 AEST 

Jana and her daughter Lily have lived in the same house for seven years and consider themselves lucky.
They pay $600 a week for a three-bedroom terrace in the inner Sydney suburb of Surry Hills. Jana has a well-paying job, Lily likes her school and the rent has only risen $10 or $20 the entire time they’ve lived there.
Around them, Sydney’s median housing price has risen 82% since 2011, with rents jumping 5% in the past year. An Anglicare report found 98% of the country’s rentals were unaffordable for those on low incomes or government welfare.
In the lead-up to the federal budget, greater Sydney’s median rent sits at $520 a week for all dwellings. In the inner city, it is $700 for two bedrooms and $900 for three.

On Saturday, Jana and Lily were asked to inspect a house on behalf of a friend looking to rent. Guardian Australia spoke to them as well as eight other prospective renters, and visited three Sydney properties, to get a sense of the rental affordability crisis.

The four-bedroom house

335 Cleveland Street, Redfern, is spacious and in the process of a drastic facelift – an “executive terrace” is rising from the ashes of a sharehouse. A builder lays down new tiling during the inspection as curious renters wander the courtyard.
The agent says it has been newly renovated to attract wealthier tenants: “If you’d seen what it looked like before, it was run down. We’ve spent a lot doing it up.
“They used to have uni students in here, or half a dozen different backpackers paying $150 a week. But the owner wanted something more professional.”
The house has four bedrooms but it’s being advertised as only having three. The owner is angling for fewer tenants but higher rent.
This is the only house Jana and Lily see on Saturday and they are not impressed: “Our friends were looking to spend $1,000, so this is out of their budget, and it’s on a main street.

I earn a very good wage – I’d probably be in the top 5% of wage earners – and I still can’t afford to buy

Jana

“You couldn’t even sit here and have a drink in peace. It’s $1,200 and it’s on one of the busiest streets in Sydney.”
The house sits just around the corner from their home and the visit has made Jana even less optimistic about the future.
“I try not to think about how long I’ll be renting for because it’s too depressing. I earn a very good wage – I’d probably be in the top 5% of wage earners – and I still can’t afford to buy ... I think it’s really sad, and it’s really unaffordable.”
Another visitor to the property, Scott, a 31-year old looking to rent with friends, is much more sanguine. “I’m really not finding [rental prices] anywhere near as bad as other people, or how the media is reporting it,” he says.
“Me and my friends are probably in a slightly higher bracket. We’re not looking for a $500 two-bedroom apartment, we’ve got a bit more money to spend.”
Scott owns property in Newcastle and has just made $100,000 from buying and flipping a new apartment off the plan. He doesn’t agree that the rental market is overheated.
“I’m a firm believer in that the value is whatever someone is willing to pay for it. If it’s overheated, that’s someone’s opinion.”

The two-bedroom house

At $640 a week, 56 Kepos Street, Redfern, sits noticeably below the area’s median rent of $710 for a two-bedroom freestanding house.
It’s a house of narrow corridors, small living spaces and a bathroom with a bit of rust. The inspection has attracted a mix of families, young couples and a lone student with her mother in tow.
Sandra is here with her young daughter, Eliza, looking for a family home – somewhere close to their school that allows pets.
“I’m in a relationship and my partner is on the disability pension,” she says. “He’s unable to work at the moment but he’s hoping to start again. We’re currently living on a single income, so of course we can’t afford to buy in Sydney. That’d be crazy.”

The bathroom in a $640-a-week two-bedroom Redfern house. Photograph: Naaman Zhou for the Guardian

The house is roughly the right size – and Eliza is a big fan of the bathroom’s pink bathtub – but eventually Sandra decides it’s not in their price range.
“We can’t really afford this place, it’d be a bit of a stretch,” she says. “Things have gotten way more expensive. For the amount you pay, you don’t get much. There’s no way we could afford the average rental price. No way.”
Like Jana, Sandra has been out of the rental market for the past six years. Her family is now paying $520 a week and know how fortunate they are.
“Where we are now, the lady who is renting to us is very lovely, she doesn’t charge very much at all. She likes the idea of having a family in there.
“We’ve been there six-and-a-half years. If she sold it, she could get more than a million for it, easy.”

The studio apartment

Unit 2/124-126 Renwick Street is a studio flat offered under the national rental assistance scheme. It sits in the heart of Redfern and, at $380 a week, is only available to those earning less than $50,000 a year.
It’s a well-maintained, surprisingly large apartment and competition is fierce. Most of the renters here are looking to enter the market for the first time.

Nadine is a single woman on government welfare, now living at a Samaritan house offering crisis accommodation. This apartment is one of the few units she has seen in her price bracket, she says.
Aitu and Tatiana are here with their one-year old daughter, Esme-Fay.

‘We don’t want to live with our parents’: Aitu and Tatiana with their daughter Esme-Fae. Photograph: Naaman Zhou for the Guardian

“We want to live on our own,” Tatiana says. “We don’t want to live with our parents. He’s working and I look after the baby. Our lease just finished so we’re looking for something a bit smaller.
“We’ve been looking since the beginning of the year and this is the first one we’ve actually come to. This unit is a really good price, it’s really affordable. Other houses around here are really expensive. Our budget is $400, $500 at most.”

Across the three properties, none of the renters know quite what the government should do to help ease the housing affordability crisis, apart from Nadine’s suggestion to “raise wages and lower rents”.
On Kepos Street, Sandra says she’s resigned to renting for the rest of her life. “We’re eligible for government rental assistance but that hardly does anything at all. We’d love to be able to rent and save enough for a deposit for a house. But as it stands, I’m in my mid-40s. Realistically, I’m never going to afford a house.
“It’s kind of something that I’ve accepted. I don’t like it, but it’s just not going to happen.”