Rental squeeze worsens for low-income earners

The rental market in Australia is seeing a big shift as high-income earners more and more dominate the non-public rental sector, squeezing out lower-income households, in accordance with PropTrack.

“Excessive revenue earners are squeezing decrease revenue earners within the rental market, highlighting the pressing want for extra reasonably priced housing,” stated Eleanor Creagh (pictured above), PropTrack senior economist.

The shift is detailed in a latest Australian Housing and City Analysis Institute (AHURI) paper, which confirmed that increased revenue earners have grown from representing 8% of the non-public rental market in 1996 to 24% in 2021.

Rental affordability disaster worsens

The PropTrack Housing Affordability Index highlighted a dire scenario the place a median-income family can now afford simply 13% of houses bought throughout the nation.

“Growing home costs and diminished affordability are related to delayed homeownership,” Creagh stated.

The continuing improve in rental costs, which have surged 42% throughout capital cities because the pandemic started, exacerbates this challenge, considerably outstripping family revenue progress.

“For households incomes within the backside 20% of households ($49,000 a yr or much less) simply 1.3% of leases marketed in March 2024 could be reasonably priced,” Creagh stated.

Lengthy-term options and authorities motion

Regardless of the gloomy outlook with continued excessive demand and low provide anticipated to drive rents increased, there’s some hope that lease will increase could gradual. Nevertheless, Creagh argued that “enhancing rental availability is essential to fixing the problem long-term.”

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