From 29 April 2022, Compass Housing Services became Home In Place.

A new report, released today by Compass Housing Services, shows housing stress was a major problem for many typical Australian renters, long before COVID-19 lockdowns began to hit household budgets.

The Affordable Housing Income Gap Report found that, prior to the Covid-19 pandemic, typical renting households in Sydney, Melbourne, Adelaide, Brisbane, Hobart and some other regional centres earned thousands of dollars a year less than the amount required to avoid housing stress on an average home.

The Report measures housing affordability for renters by establishing the amount of additional income a typical renting household needs to avoid housing stress on various types of dwellings in NSW, Victoria, Queensland, South Australia and Tasmania.

Report author, Martin Kennedy, said the report shows that housing stress isn’t just something experienced by people on low incomes.

“Even before the current crisis working families with average incomes often struggled to rent suitable properties close to jobs,” he said.

“Throw in the possibility of reduced hours or a job loss due to COVID-19 and things can become very tough indeed.

“Although rents are expected to fall in the short term due to more stock coming on to the market, they may not fall far enough to become affordable for typical renting households.

“In some areas, rents would need to drop by up to 50% to become genuinely affordable, and that’s only if people manage to sustain their current levels of income.

“More to the point, it shouldn’t take a global pandemic, closed borders and widespread lockdowns to bring median rents more in line with median incomes.”

Mr Kennedy said the existence of the affordable housing income gap is part of a broader housing crisis.

“The problems facing renters are largely due to purchase prices being too high and social housing supply being too low.”

“Unfortunately, people who can’t afford to buy, and don’t qualify for social housing, have no option but to cut back elsewhere and try to manage as best they can.”

In some areas, rents would need to drop by up to 50% to become genuinely affordable, and that’s only if people manage to sustain their current levels of income.

Martin Kennedy

The Report’s recommendations include:

  • the construction of 500,000 social and affordable housing dwellings in the next 10 years
  • stricter controls on residential mortgage lending to keep borrowings to realistic multiples of household income
  • repealing stamp duty in favour of a broad-based land tax
  • relaxing urban growth boundaries which artificially ration the supply of land
  • scrapping first home buyer grants and stamp duty exemptions
  • giving renters more protection under state and territory tenancy laws
  • alternative allocation models for social housing.

Compass Housing is a not-for-profit, community housing provider with almost 7000 properties in NSW, Queensland and New Zealand.

Report Key findings

Hobart had some of the least affordable rental housing in Australia. There were no local government areas (LGAs) in the Greater Hobart area that were affordable for typical renting households seeking detached housing. Detached homes in the regional centres of Launceston, Burnie and Devonport are also unaffordable for typical renting households.

Median rents in some areas of Brisbane had fallen sharply, including desirable inner suburbs such as St Lucia, Highgate Hill and Yeronga. Rents rose strongly in other areas with approximately a third of postcodes experiencing rental increases above inflation.

There were no inner or middle Melbourne suburbs where the median rent on a detached three or four bedroom house was affordable for a typical renting household.

While the overall median rent in Adelaide’s LGAs is affordable for typical renting households in approximately 85% of cases, the median rent for detached three-bedroom homes is unaffordable in 70% of cases. All LGAs are affordable for typical renting households seeking a two-bedroom unit.

There was nowhere in Sydney’s inner or middle suburbs where the median rent of a 4-bedroom home was affordable for a typical renting household, and just three LGAs (Canterbury-Bankstown, Cumberland and Ryde) where median rents for a 3-bedroom home were affordable.

City Least affordable LGAs/suburbs/postcodes Most affordable LGAs/suburbs/postcodes
Greater Sydney Woollahra, Waverley, Northern Beaches (Manly, Pittwater, Warringah), Mosman, Sydney Campbelltown, Penrith, Fairfield, Blacktown, Hawkesbury, Blue Mountains
Melbourne Brighton East, Brighton, Mt Eliza-Mornington-Mt Martha, Port Melbourne, Fitzroy, Carlton North Melton, St Albans-Deer Park, Sunshine, Dandenong, Noble Park
Greater Adelaide Walkerville, Adelaide Hills, Burnside Playford, Gawler, Salisbury, Onkaparinga, West Torrens
Hobart City of Glenorchy, Municipality of Sorell, Municipality of Brighton, City of Clarence, City of Hobart Municipality of Kingborough, District of Clarence
Greater Brisbane 4516 Elimbah, 4520 Camp Mountain/ Cedar Ck/ Mt Glorious/ Mt Nebo/ Mt Samson/ Samford/ Yugar, 4069 Brookfield/Chapel Hill/Kenmore, 4037 Eatons Hill 4035 Albany Ck/ Bridgeman Downs/ Cash’s Crossing. 4184 Coochiemudlo Is/ Karragarra Is/ Lamb Is/ Macleay Is/ Peel Is/ Russell Is, 4106 Brisbane Market/Rocklea, 4111 Griffith Uni/Nathan, 4304 Booval/ Blackstone/ Bundamba/ Ebbw Vale/ Silkstone, 4102 Buranda/Dutton Park/Woolloongabba, 4303 Dinmore/ Riverview.

The Affordable Housing Income Gap for 3br homes and 2 br units by sections of capital cities

Annual income to affordably rent a 3br house Amount above annual median income (AHIG) Annual income to affordably rent a 2br unit Annual amount above median income (AHIG)
Inner Sydney $164,667 $67,063 $121,333 $23,729
Inner Melbourne $137,800 $55,373 $95,333 $12,906
Inner Brisbane $96,200 $15,814 $84,933 $4,548
Greater Hobart $72,800 $13,104 $60,667 $971
Adelaide LGA $81,467 $16,207 $72,800 $7,540

Media information: Martin Kennedy, Compass Housing on 0418 353 913.

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