Australia

Hobart is the least affordable Australian city for renters

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The latest data shows many people on low to median incomes are struggling to pay their rent in Hobart and Sydney.

Hobart has once again been given the unfavourable title of the least affordable Australian city for renters.

The latest Rental Affordability Index - released by National Shelter, Community Sector Banking, SGS Economics & Planning, and the Brotherhood of St Laurence - found even households on average incomes in the Tasmanian capital are now at risk of rental stress.

But while Hobart continues to hold the top spot, rental affordability in other cities like second-placed Sydney have marginally improved since the last survey six months.

James Barron, head of relations at Community Sector Banking, said despite the slight improvement, it is still a serious problem across the country.

"Rents are way too high in many capital cities of Australia," he said. "It's causing a lot of additional social and economic problems that millions of Australians are confronting."

Hobart remains the least affordable Australian city for renters.
Hobart remains the least affordable Australian city for renters.
AAP

The Rental Affordability Index is an indicator of the price of rents relative to household incomes.

An index of 100 and below shows households would be required to spend at least 30 per cent of their income on rent, while an index of 200 or above is considered extremely affordable.

Greater Hobart reached an index of 101 in June this year, meaning average rents in the city are now unaffordable.

Greater Sydney is also considered moderately unaffordable with an index of 113.

Mr Barron said Hobart's poor ranking is a combination of high unemployment and lack of housing, while Sydney's is a problem of high demand.

"As the city grows, more and more people are being forced to the outer extremities of those cities where infrastructure is at a premium," he said.

"For hundreds of thousands of citysiders who are living up to 20-30 kilometres away from the centre of Sydney, they are spending well and truly over 30 per cent of their weekly income."

Singles worst affected

National Shelter executive officer Adrian Pisarski said the data shows single mothers, and single adults more generally, are the worst affected demographic.

"We know that there is also a lot of discussion about single, older females finding it tough," he said. "But effectively, anybody who is single and looking for a single-bedroom property is going to find it very difficult to rent anything that is affordable."

Tenants Union of New South Wale's Leo Patterson Ross said one solution to unaffordable rent is to create more social housing.

"The solutions are very similar in every state," he said. "We need to expand the eligibility for our social housing stock in order to create sustainable systems."

National Shelter's Adrian Pisarski said Australia is in a housing crisis at the moment and a national housing strategy is needed.

"Social housing is part of that, but so too is tax reform, so too is planning measures, so too is doing something about the middle-income groups that are under great housing stress," he said.

"So to do all of those things in a coordinated, cohesive fashion, we will require a national housing strategy to make sure over the next 20 years, we don't have the problems we're currently facing."

Perth most affordable

Mr Patterson Ross, said renters in Sydney are also "struggling" with very high rent.

"They do tend to have higher incomes but many people across the Greater Sydney area don't earn that much money and so they are often in rental stress," he said. "In the regions, we often see lower rental prices but unfortunately there's also lower incomes."

Around the country, Greater Melbourne is considered to be moderately unaffordable for renters with an index of 127.

Rents in Greater Brisbane are now considered acceptable, after recording 123 in the latest index up from 111 in March 2011.

Meanwhile, Greater Adelaide has experienced the largest decline in affordability of all the states studied since the last release, recording an index of 114, while renting in Greater Perth is consistently affordable with an index of 144.

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