Anglicare Australia published its fifteenth Rental Affordability Snapshot on 23 April. The report’s headline findings will not surprise anyone. Of the 45,115 listings recorded on March 2024, fewer than 300 were affordable to a person on the minimum wage and close to zero were affordable for anyone on the aged pension, a disability pension or Job Seeker.

And of course, just because a dwelling is theoretically affordable to someone a low income, it does not mean it’s going to be let to them. Recently published research from AHURI, Affordable Private Rental Supply and Demand clearly demonstrates that much housing affordable to low income groups is, in fact, occupied by higher income earners.

For example, while there was an estimated shortfall of 255,000 private rental homes affordable to households in Income Quintile 1, the shortfall rose to 348,000, once the availability of those affordable homes was considered. In other words, there is a ‘crowding out’ problem.

Rental unaffordability for lower income groups is hardly new, but it has got worse. The Anglicare report also looks back to track how much worse the problem has become. For example, in 2012 a family on the minimum wage, ‘would have been able to afford just over 30 percent of all properties we surveyed. In the past decade, this has more than halved’. While ‘ten years ago, a couple on the Age Pension could afford 3.6 percent of surveyed properties, down to one percent this year’.

A recent trend recorded by the Snapshot has been the sharp drop in rental listings.  ‘In 2012, the national vacancy rate hovered at around two percent, and did for much for much of the following decade. In the last three years, vacancy rates crashed, declining to new lows averaging one percent.’

This decline in rental affordability for lower income groups has come at a time when governments have also not been investing sufficiently in social and affordable housing, with on average only around 3,000 homes being completed annually (with many of these replacing demolished units). With the creation of some state housing programs and the establishment of Federal housing initiatives, notably the Housing Australia Future Fund (HAFF) the net gain should increase. But these programs need to be bigger, and in place for the long term, so able to run annual funding rounds.  A welcome first step would be for the Federal Government to cement it’s leadership role and back our call as part of the National Housing Alliance to double the HAFF in the forthcoming budget.

In the longer term, the anticipated National Housing and Homelessness Plan, should set clear targets for increasing the amount of social and affordable rental housing. While the cost of such a program is often cited as a barrier, new modelling on reforming investor landlord taxes commissioned from the Parliamentary Budget Office by Senator David Pocock and  Senator Jacqui Lambie provides an answer.

Their most modest reform option modelled by the PBO, ‘where CGT discount is grandfathered for existing rentals and halved for newly built homes, with negative gearing retained for a landlord’s first rental property’, saves the federal budget $16 billion by 2033-34’. As they say ‘This is money that could be re-invested in the supply of desperately needed social and affordable housing’.