A new report shows housing stress was already a major issue for typical regional NSW renters, long before COVID-19 lockdowns began to hit household budgets.
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The Affordable Housing Income Gap Report, produced by Compass Housing Services, found that, prior to the Covid-19 pandemic, renting had become marginally cheaper across the bulk of the Greater Sydney area but significantly more expensive in certain regional areas of NSW.
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.
According to the Report, non-metropolitan local government areas (LGAs) in NSW have greater affordability issues than other states. Of the 10 least affordable local government areas in NSW, four are outside Sydney.
Report author, Martin Kennedy, said lower household incomes in regional NSW means that typical renters in many areas experienced housing stress despite nominally cheaper rents.
Mr 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.
"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."
Regional NSW's least affordable LGAs for renting were Byron Tweed Shire, Clarence Valley (Grafton), Ballina, Coffs Harbour Shoalhaven, Port Macquarie, Goulburn, Kiama and Port Stephens.
The most affordable LGAs for renting were Upper Hunter, Broken Hill, Wagga Wagga, Tamworth, Western Plains (Dubbo), Queanbeyan, Albury, Bathurst, Orange, and Armidale.
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 support and stronger protection under state and territory tenancy laws.
- alternative allocation models for social housing.
Compass Housing is a regional NSW (Newcastle) based not-for-profit, community housing provider, that manages almost 7000 properties, in Australia and New Zealand. The report is available from www.compasshousing.org
