Record growth in rent prices across the country will push more Australians into housing stress and poverty, with some at risk of becoming homeless, a leading group has warned.
Homelessness Australia said data released today by PropTrack showing a staggering 10% hike in advertise rental prices across the capital cities in 2022 is alarming.
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While price growth steadied in the December quarter, the median cost of renting a home nationally now sits at $480 per week, the latest PropTrack Market Insight shows.
“The latest annual rent growth adds to what was already an unaffordable rental market,” Homelessness Australia chief executive Kate Colvin said.
“These figures are alarming and are further proof that more Australians are doing it tough, plunging deeper, or for the first time, into housing stress and poverty.”
The rising cost of rent is putting more Aussies at risk of homelessness. Picture: Getty
Ms Colvin said housing stress is the fastest-growing cause of homelessness and support services are being “smashed” by desperate people seeking help keeping a roof over their heads.
Ms Colvin pointed out the national rental vacancy rate, which now sits at a record low of 0.8%. Experts consider a balanced rental market to be one with a vacancy rate of at least 3%.
No capital city in the country currently has a vacancy rate anywhere near that, making the prospect of finding a place to rent an increasingly difficult one.
“With vacancy rates remaining tight and rents staying high, struggling renters are set to experience another horrid year without targeted intervention,” Ms Colvin said.
“The dreadful stories we keep hearing of people sleeping in cars and skipping meals will sadly continue.”
Rental vacancy rates are at alarming lows across the country. Picture: Getty
Both state and federal governments have announced various measures to tackle the rent crunch, from increased funding for affordable housing to schemes to help Aussies buy their first home.
But Ms Colvin said those at risk of homelessness due to skyrocketing costs “can’t wait years” for long-term policies to bear fruit.
“The next budget needs include immediate relief by increasing Commonwealth Rent Assistance and delivering a much bigger commitment to social housing,” she said.
Housing stress is the fastest-growing cause of homelessness. Picture: Getty
Rent Assistance payments are available to those on pensions or receiving some kind of welfare benefits, like JobSeeker.
But Associate Professor Bruce Bradbury from the Social Policy Research Centre at UNSW Sydney described the amount available as “only modest”.
“It amounts to 75% of the rent paid between two thresholds, both of which are low compared to actual rents,” Mr Bradbury wrote today in an article for The Conversation.
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“For people living alone, the upper threshold is $169 per week, for a couple with two dependent children it is $250 per week,” he said.
“The maximum available to a person living alone is $75.80 per week, or about $10 a day. The maximum available to a couple with two dependent children is $89.20 per week – about $13 per day.”
The Henry Tax Review, conducted in 2009, made a recommendation to lift the upper threshold for one- and two-bedroom dwellings in capital cities.
“My calculations suggest the threshold proposed by the Henry Review would now be $354 per week – more than twice the current upper threshold for singles,” Mr Bradbury said.
“If the rest of the payment formula remained unchanged, this would boost the maximum payment 2.8 times to around $215 per week for singles – enough to make a big dent in rent payments. And it would automatically adjust in line with subsequent rent increases.”
Concerns aired at the time that any increases would “be simply redirected into landlords’ pockets” are largely unfounded, he added.
“The Henry Review argued that wouldn’t happen much, and to the extent it did, it would encourage more investment.”
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