‘War on homelessness’: Rent crisis reaches record low, hurts economy – realestate.com.au

Australia’s rental crisis has become so dire that industry groups are calling for a “war on homelessness” as police, teachers and nurses are pushed out of some areas entirely.

Nearly every state’s regional areas have just hit their worst levels of affordability ever, with most capital cities barely above the bottom, and it’s now starting to hurt the country’s economy as businesses in some areas struggle to attract workers.

The latest National Shelter-SGS Economics and Planning Rental Affordability Index released today also warns that while green shoots are emerging, particularly a growing political response to the crisis, it is still not clear whether renters will face further pain before things improve.

RELATED: One million Australian homeowners stuck in housing gridlock

‘Sad’: Broke Block stars forced to sell their home

How to Protect Yourself From Settlement Scams When Buying a Home

The index showed affordability improved by one percentage point in Sydney and four percentage points in Canberra. Growth was stable in Melbourne and Adelaide, but fell by two percentage points in Brisbane and fell by four percentage points in Perth.

But areas outside state capitals fell to new lows everywhere except South Australia.

Ellen Witte, head of SGS Economics & Planning, said affordability was stabilizing in many urban areas after the “rapid decline” since 2021 was largely due to “renters reaching their limits and being unable to pay” and tenants were still in “bad shape”.

“Regional Australia, on the other hand, continues to see unaffordability spreading to increasingly remote places,” Witte said.

SGS Economics and Planning in providing the Rental Affordability Index Melbourne chart – for Sun Real Estate’s announcement

---

SGS Economics and Planning in delivering the Rental Affordability Index Adelaide chart – foreshadowing Sun Real Estate

---

Deteriorating conditions in regional and remote areas were likely driven in part by workers previously living in capital cities moving as they sought more affordable housing in the work-from-home era.

“Regional cities like Bendigo and Ballarat, in Victoria, and Orange and Bathurst, in NSW, have all become much less affordable,” she said.

“And the economy is starting to be hurt by this. Companies can’t find workers, and they can’t operate at 100 percent capacity if they can’t get workers there.”

Ms Witte noted that the only area to see a meaningful improvement in the rental crisis was the ACT, where government intervention meant landlords could no longer increase rents by more than 110 per cent of the consumer price index unless they sought special permission.

Rather than supporting those who can afford to buy investment properties or homes to buy existing homes, Ms. Witte said she would prefer to see more emphasis on programs that would lead to further housing construction.

SGS Economics and Planning in providing the Rental Affordability Index Sydney chart – for Sun Real Estate’s announcement

---

SGS Economics and Planning in providing the Rental Affordability Index Brisbane chart – for Sun Real Estate’s announcement

---

National Shelter chairman John Engeler said this as he was encouraged by some of the “green shoots” emerging as governments made announcements such as a new round of Housing Australia Future Fund to support affordable housing for key workers.

However, Mr Engeler said the reality was that many renters were reaching their limits and struggling to find affordable alternatives.

“People will say this week they can afford it, but if the rent goes up 10 percent they won’t have anywhere to go because the vacancy rate is so low,” he said.

Housing All Australians founder Robert Pradolin said the nation must “declare war on homelessness” because without a united response from all sides of politics the nation would see the situation worsen and companies would have to follow in the footsteps of Amazon, Facebook and the like, who are now spending huge amounts of money on providing homes for workers.

“We already have problems getting enough police, nurses and teachers in some areas because of the cost of housing,” he said.

“It’s been a social problem, and that’s not necessarily top of mind, but this is now becoming a fundamental business problem.”

Ellen Witte of SGS Economics says the country’s regional areas are experiencing their worst affordability on record.

---

Robert Pradolin, founder of Housing All Australians Limited, says the nation needs a war footing against the housing and homelessness crisis.

---

In the absence of a national approach supported by all political parties, Pradolin said Australia risks following in the US footsteps – and is just 25 years removed from the superpower’s horrific homelessness situation.

While he said the Housing Australia Future Fund’s efforts to build an additional 13,000 homes were positive, the country had a shortfall of 44,500 social homes and ways were needed to encourage the private sector.

Housing All Australians is a national organization that seeks business solutions to the country’s housing crisis.

One of the programs is a Progressive Residential Affordability Development Solution (PRADS) that would give developers preferential outcomes in exchange for providing more affordable housing in projects housing police officers, teachers, nurses and other key workers.

“It’s all about supply, that’s economics 101, so the only handout should be subsidizing rental housing to get key workers close to their workplaces,” Mr Pradolin said.

SGS Economics and Planning in providing the Rental Affordability Index – the relative affordability of capital cities – for Sun’s precursor properties

---

SGS Economics and Planning in delivering the Rental Affordability Index for key rental groups assessed – for Herald Sun Real Estate

---

The plan would also create a national register of affordable housing spaces that could be searched by key workers, unlike the current situation where they had to approach existing housing support groups in their area.

The RAI report also assessed the ability of specific rental groups to cover the costs of keeping a roof over their heads and found that many of these groups, such as hospitality workers, single parents and pensioners, would now face rental stress if they wanted a home in every capital city.

Only dual-income people would be able to find affordable rent anywhere in any city, although some areas would be outside of that.

Sign up for the Herald Sun weekly property update. Click here to receive the latest news from the Victorian property market straight to your inbox.

MORE: Mortgage refinancing frenzy strikes as banks cut variable and fixed mortgage rates

Silent danger lurks in thousands of Australian renovations

Albo’s solution for the affordability of 1.2 million homes is dead