Rental Affordability Woes Linger into the New Year

07 February 19

The Productivity Commission’s 2019 Report on Government Services has found that despite the Government spending $4.4 billion on Commonwealth Rent Assistance during the period of 2017-18, Australian families on low incomes continue to experience ongoing rental stress.

 

As at June 2018, 68.3 per cent of low-income households who received Commonwealth Rent Assistance (CRA) indicated they would have experienced rental stress without the financial aid. However, with CRA, 40.3 per cent of households still experienced rental stress, which is defined as spending more than 30 per cent of gross household income on rent.

 

The report also found that in the period between 2015-16, 40 per cent of the quarter of Australian families renting in the private market were also experiencing rental stress.

 

Jason Cubit, CEO of Queensland’s largest social and affordable housing provider, Horizon Housing, said the nation’s rental affordability issue is at a critical point.

 

“Community housing is at capacity with over 95 per cent of properties occupied,” Mr Cubit said.

 

“Through-the-roof rents mean the pool of tenants who rely on these services will increase and we will continue to see more low-income families needing support.”

 

“The figures released in this report are significant and demonstrate the need for more affordable housing options in Australia.”

 

“In addition to this, the first tranche of affordable housing properties subsidised under the Government’s National Rental Affordability Scheme (NRAS) have either already reached their expiry or are coming up to their expiry in 2019. As the years roll on, thousands of vulnerable Australians could lose their home if a replacement scheme for NRAS is not introduced.” 

 

The ten-year scheme which commenced in 2008, offers investors an annual financial incentive to rent homes at 20 per cent below market rates.

 

Although welcoming Labor’s announcement of a $6.6 billion affordable housing scheme at the ALP national conference in December last year, Mr Cubit said that until a new scheme is introduced, the number of affordable homes on the market will decrease, as investors return their properties to at-market prices – potentially pushing low-income tenants out.

 

“What we are expecting to see as NRAS properties wrap up, is an increase in rent prices of around 20 per cent. This means if tenants are currently paying $336 a week, rents could potentially go up to at least $420 a week – a considerable jump when you consider many of these tenants are already concerned about their financial security.”

 

“Horizon Housing has been managing NRAS properties for a decade, with almost 600 of these on the Gold Coast alone. We have been providing social and affordable housing to the Gold Coast community for over 25 years and we’re looking to use this experience to benefit tenants and facilitate continuity with affordable tenancies,” he said.

 

“We know from experience that investors experience high demand for affordable housing properties, but as the subsidy expires, so too will investors’ ability to retain long-term tenancies,” Mr Cubit said.

 

Mr Cubit said by providing transition services for former NRAS tenants and investors and focusing on new opportunities to increase affordable housing supply, the impact on the affordable housing market may lessen.

 

“We would be in full support of the Federal Government should it announce a replacement incentive for NRAS, as it will undoubtedly benefit our entire community at a much broader level. For now, will continue to look for ways to support those who need it with safe and sustainable housing options.”