Rental stress a reality for the Illawarra: Compass Housing report

Sydney-style rents but lower incomes mean many renters in the Illawarra and Shoalhaven are facing housing stress, a report suggests. 

The Affordable Housing Income Gap Report, released on Tuesday by community housing provider Compass Housing, measures housing affordability for renters. 

The report establishes the amount of additional income a typical renting household needs to avoid housing stress on various types of dwellings in NSW, Victoria and Queensland. 

This amount is referred to as the Affordable Housing Income Gap (AHIG).

Housing or rental stress occurs when more than 30 per cent of a household’s income is spent on rent. 

The AHIG is calculated by subtracting the median weekly household income of renting households in a particular area, from the weekly household income required to pay the median rent in that area without exceeding the 30 per cent affordability threshold.

The report notes that due to relatively lower incomes, typical renters of detached dwellings in the Greater Sydney area’s outlying LGAs like Newcastle, Wollongong and Shellharbour face moderate to severe housing stress. 

The report indicates that overall, median rents take more than 30 per cent of median incomes in the Kiama, Shoalhaven, Wollongong and Shellharbour LGAs.

It also calculated a weekly AHIG of $280 in Kiama, $185 in the Shoalhaven, $151 in Wollongong and $146 in Shellharbour. 

The median weekly rent is highest in Kiama ($500), meaning renting households are spending more than 36 per cent of income putting a roof over their head.

Kiama has a renters’ median weekly household income of $1387.

The report ranked Kiama among the least affordable LGAs in the Greater Sydney Metropolitan area. 

Median weekly rents are lowest in Shoalhaven ($370), but median incomes are lower ($1048), meaning renters there are paying 35 per cent of income in rent.

Wollongong (weekly median rent of $450, renters’ median weekly household income of $1349) and Shellharbour (weekly median rent of $460, renters’ median weekly household income of $1387) renters are paying 33 per cent.

The report notes that even in the regions, “where prices are nominally cheaper, the comparatively lower incomes mean median income renting households in many areas face significant affordability income gaps”. 

“The impact is particularly severe in ‘commuter belt’ cities close to the capitals,” the report said.

Compass Housing spokesperson Martin Kennedy said the findings prove housing stress isn’t just a problem for low income households.

He said rents in regional centres are not always much lower than Sydney, but incomes are lower.

“Even working people are struggling to afford suitable rental properties,” Mr Kennedy said.

“This can have a real impact on living standards because people in housing stress are less able to pay for other essentials like food, utilities, insurance, healthcare, childcare and debt repayments.

“The steady decline of housing affordability for renters is part of a broader housing crisis driven by a combination of low interest rates, preferential tax treatment for investors, rapid population growth, artificial rationing of land supply, high transfer duties and, a prolonged failure to invest in social and affordable housing.”

The report recommends the creation of a national housing plan with initiatives crossing all levels of government. 

These include the construction of 500,000 social and affordable housing dwellings in the next 10 years; and reforming state tenancy laws to provide greater security of tenure for renters and decrease demand for social housing.