Rents in regional NSW are not much more affordable than greater Sydney, new data indicates.
The latest Rental Affordability Index (RAI) data was released this week.
National Shelter, Community Sector Banking and SGS Economics and Planning have released the RAI on a biannual basis since 2015 as an indicator of rental affordability relative to household incomes.
It indicated that rental affordability in Sydney has fallen to a record low, with the average tenant spending 29 per cent of their household income on accommodation, pushing them towards the rental stress threshold.
Rental stress occurs when more than 30 per cent of a household’s income is spent on rent.
However, rents in regional NSW are not much more affordable than greater Sydney.
According to the data, regional NSW has also declined in affordability since the last release. The average household seeking to rent in regional NSW would face rent levels at 28 per cent of total income.
“Historically, people could have moved to cheaper areas but in NSW there is almost nowhere to run, nowhere to move to – it’s hopeless,” Ken Langston, head of government and sector relationships at Community Sector Banking told The Domain Group.
“So you have to make tough choices about what you do with what little income you have left. Do we cut back on meals? Do we not see the doctor?”
According to last year’s Housing Affordability Survey from US public policy group Demographia, Wollongong has a median household income of $65,000.
Alex Frino, Professor of Economics at the University of Wollongong estimated that for the Illawarra region,the average annual household income isapproximately $65,000.
The latest RAI data indicates that at that income level, renting a two-bedroom home in the Kiama or Gerringong areas would be unaffordable. Other results for the same household income included the Dapto area (acceptable), Lake Illawarra (moderately unaffordable), Port Kembla (moderately unaffordable), the Wollongong/Keiraville area (unaffordable) and Thirroul (unaffordable).
For a three-bedroom at the same income, Kiama/Gerringong is severely unaffordable. Other results include the Dapto area (unaffordable), Port Kembla (unaffordable), Shellharbour City Centre (unaffordable/severely unaffordable), Wollongong/Keiraville (severely unaffordable) and Thirroul (severely unaffordable).
Jack de Groot, CEO St Vincent de Paul Society NSW said it is estimated 875,000 households in Australia are currently experiencing housing stress.