Tenants across Australia are grappling with the toughest rental market in decades, with Western Australia recording one of the country’s largest drops in affordability.
A major economic report revealed that Perth recorded an equal second-worst drop in rental affordability for a major Australian city — plunging by 10 per cent — while the State’s regional areas fell by 8 per cent.
Every city except for Hobart and Canberra has had affordability worsen according to National Shelter and SGS Economics’ latest Rental Affordability Index, a study which laid bare a “rapid deterioration” of prices across all major cities.
Sydneysiders were the worst off, with affordability dropping by an eye-watering 13 per cent.
However Perth and Melbourne both took the unenviable second spot, each experiencing a 10 per cent drop.
With rental affordability so low, there are concerns that things could become even more dire for renters according to National Shelter chief executive Emma Greenhalgh.
Only one Perth postcode around Winthrop and Bateman offers affordable rents — costing 15 per cent or less of the average income.
“Perth has suffered one of the steepest declines in affordability among capital cities, behind only Sydney, while regional WA has only declined more than every rest of the State area,” Ms Greenhalgh said.
“From Fremantle to Fitzroy Crossing, WA renters have been smashed by some of the worst rent rises in the country over the past year.
“This dire rental crisis is caused by a chronic shortage of available and affordable homes, an issue which requires continued urgent co-operation across the WA housing sector and government.”
Ms Greenhalgh confirmed the problem was widespread across the nation, and was set to worsen with interest rates once again on the rise.
“In the past year, renters have been smashed with enormous rent hikes well beyond income growth,” she said.
“With vacancy rates so incredibly low, landlords have been able to pass on interest rate rises to tenants — and the pressure is only set to increase following last week’s rate rise.”
The impact of the “deep economic problem” will soon be felt beyond renters, with essential workers forced to move away from their work, putting strain on healthcare, policing and other industries according to SGS Economics principal Ellen Witte.
“Key workers in critical industries are travelling further and further and being priced out of their city,” she said.
“We need a serious plan to provide the right housing at the right price to people who really need it.”
Housing Minister Julie Collins said that the Commonwealth Government would continue to work with states and territories to “ensure more Australians have a safe and affordable place to call home.
“At a federal level, our focus is on improving housing supply, because this is the best way to improve housing affordability for renters and buyers,” she said.
“That’s why we’ve made significant announcements around boosting supply right across the country, from improving taxation arrangements for investments in build-to-rent accommodation to directly funding social rental homes.”
The report highlighted the Perth suburb of City Beach, which it ranked as “severely unaffordable” with a median weekly rent of $1200. The report found that the average household would spend 59 per cent of their income on rent.