The pandemic brought down rents – but Australia’s housing is still grossly unaffordable for many.

 Extract from The Guardian

Grogonomics Housing

Greg Jericho

The lack of supply of low cost, appropriately sized housing remains as critical as it has ever been.

• Only three rental properties in Australia are affordable for singles on jobseeker – study
• Sydney’s 8.5% quarterly house price rise largest in three decades

‘Anglicare found that of the 74,266 properties that were available for rent around Australia on 26 March this year, just three were affordable for a single person on jobseeker.’

Thu 29 Apr 2021 03.30 AEST

Last modified on Thu 29 Apr 2021 14.52 AEST

Despite the pandemic bringing about low inflation and the unusual case of rental prices falling, the reality on the ground is dire for low-income households. The latest Anglicare rental affordability snapshot shows affordability – especially for families – has plummeted.

The latest consumer price index figures released on Wednesday showed inflation grew in the past 12 months by just 1.1%. In the past such a figure would have been noteworthy as absurdly low, and yet in our weird pandemic economy it is actually an improvement:

Graph not displaying properly? Click here

But while overall price growth is increasing (mostly due to petrol prices and health care costs) the price of rents in the first three months of this year were 1.4% below what they were before the pandemic hit last year.

That of course is the Australian average, but all capital cities have either falling rent prices (Sydney, Melbourne, and Darwin) or slower growth than in the past couple of years:Graph not displaying properly? Click here

But while this might lead you to expect that affordability has improved on average for renters, the latest Anglicare Rental Affordability Snapshot reveals that this is not the case for low-income households.

Each March Anglicare goes through the rental listings to see what is affordable and what is appropriate for different households – such as those on the aged pension, a single person on jobseeker or a couple on the minimum wage with two kids.

This process cuts through the verbiage around the cost of living and housing affordability by presenting the reality on the ground.

And the ground is rather arid.

Anglicare found that of the 74,266 properties that were available for rent around Australia on 26 March this year, just three were affordable for a single person on jobseeker – and all three were share accommodation. One was in Brisbane, one in Perth and one in the NSW Riverina region.

Everywhere else there was nothing.

The reality is not much better for those on either the aged pension, the parenting payment, or disability support payment. It is really only until you get to the minimum wage that you see more than 1% of properties being affordable and appropriate.

Graph not displaying properly? Click here

For a single person on the minimum wage, Brisbane is the best metropolitan area for choice, and even then, just 4% of available rental properties are affordable and appropriate:

Graph not displaying properly? Click here

And while the lack of properties is meagre for all low-income households, what is clear from the 2021 snapshot is that things have become much worse.

For a couple on the aged pension or a single parent on the parenting payment, things are as bad now as they have been for many years, and are shockingly worse compared to last year when the Covid bonus was included:

Graph not displaying properly? Click here

The options are always better for those on the minimum wage – especially if you have a couple both earning $753.80 a week.

But even here we see that the amount of affordable and appropriate rental properties is much lower than it has been for many years:

Graph not displaying properly? Click here

The issue is not just affordability, but appropriateness.

If you are a single person or a couple, you pretty much have the choice of every property listing (except share housing for couples).

But as soon as you have children, and children above certain ages, the needs change and the options shrink considerably.

In Melbourne, there were 32,289 rental listings on 26 March, but just 9,903 of them were suitable for a family with two children.

For single people and couples, affordability is the key; for those on DSP affordability and appropriateness both need to be covered (and this of course excludes the other aspect which cannot be measured of the suitability of the precise location):

Graph not displaying properly? Click here

A couple in Melbourne both on the full-time minimum wage could afford to rent 23,382 properties, but just 42% (9,903) of them were appropriate for a family of four, and just 5,132 were both affordable and appropriate.

While this suggests that things perhaps are not too bad for a couple on a minimum wage – they can afford around half of the properties that are suitable for a family of four – across the country, the situation is clearly dire for those existing on just one minimum wage:

Graph not displaying properly? Click here

For a family of four with just one adult earning the full-time minimum wage and the other partner on the parenting payment and Family Tax Benefits, the best place in Australia is Adelaide, where they can afford 14% of all family appropriate properties.

Thus even the best situation sees them locked out of more than 85% of the family-suitable rental market.

The Anglicare snapshot highlights that while employment might have recovered to pre-pandemic levels and inflation growth is extremely low, the lack of supply of low cost, appropriately sized housing remains as critical as it has ever been.