About affordable rental housing
Understand what affordable housing is and who can access it
Why do we need to be concerned about housing affordability?
People in NSW earning very low to moderate incomes are increasingly unable to access housing that is affordable.
At the 2021 Census, 59.2% of very low to moderate income rental households in NSW were in housing stress[1]. This is over 480,000 households. Since the Census, additional COVID income assistance has been withdrawn, rents have increased considerably and the rental market has tightened with very low vacancy rates. This figure is likely to be much higher in 2023.
Between the June quarter 2022 and the June quarter 2023, median rents for units in the Greater Sydney Metropolitan Region increased by 25.0%, from $520 per week to $650 per week[2]. Over the same period, according to the ABS, the wage price index in NSW increased by just 3.4%. Clearly rents are increasing at a much faster pace than wages.
Demand for affordable housing far exceeds supply. This continues the upward pressure on rents and house prices and leads to a decline in the number of affordable private rental properties available, even in suburbs where there is an overall increase in supply. Analysis of Rental Bond Board data from June 2022 showed a 10% decline in the number of available private rental properties affordable to low income households when compared to data from June 2021[3]. This trend appears to be consistent across the state in both regional and metropolitan locations.
While there are increasing numbers of households relying on the rental market as a long term housing option rather than a transitional one between leaving home and buying a home, there are declining numbers of private rental properties which are affordable to lower income households.
People on low incomes living in rental housing are some of the most vulnerable people in the community and at highest risk if there is any tightening of supply or price increases in the private rental market. Households which are struggling to pay housing costs are faced with a range of issues that further erode their ability to meet costs. These include:
- living with unmanageable levels of debt, further exacerbating housing vulnerability
- working long hours to pay for housing
- travelling long distances to work or services
- living in overcrowded or substandard housing
- going without essentials such as adequate food, heating, medication or education
- missing out on other opportunities because housing costs are too high relative to income.
[1] A household is described as being in housing rental stress when they are paying more than 30% of their gross household income in rent.