Supply shortages and affordability outcomes in the private rental sector: short and longer term trends

Low income housing Housing Homelessness Rental housing Housing prices Affordable housing Housing assistance
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The research sought to measure  whether lower income households are able to access housing which is ‘affordable’ based on weekly rent of no more than 30 per cent of gross household income and ‘available’ referring to the extent to which affordable dwellings are in fact occupied by lower income households. The research method involved original empirical analysis using customised data from the 2011 Census of Population and Housing conducted by the Australian Bureau of Statistics (ABS), using an established methodology used in three previous AHURI studies.

The situation for both the lowest income 20 per cent of households (Q1) and second lowest 20 per cent (Q2) deteriorated on three measures of shortage between 2006 and 2011.

Very-low-income (Q1) households faced a shortage of 187 000 affordable dwellings nationally in 2011, up from 138 000 in 2006. However, when occupation of affordable dwellings by higher income households was taken into account, there was a shortage of 271 000 affordable and available rental dwellings for Q1 households (up from 211 000 in 2006). The consequences of these shortages are severe. Across Australia, four in five Q1 private renter households did not live in affordable housing in 2011, much the same as in 2006.

Low-income (Q2) households, in contrast, had an apparent surplus of affordable dwellings of 521 000 nationally in 2011 (a slight decrease compared with 2006). However, when occupation by higher and some lower income households was taken into account, there was a shortage of 122 000 affordable and available dwellings nationwide in 2011 (up from 87 000 in 2006).

Shortages of affordable and available rental stock for both Q1 and Q2 households are worse in metropolitan than non-metropolitan regions, with especially large shortages in Sydney and Melbourne. Shortages of affordable and available rental housing also increased markedly in larger regional centres in states that were affected by the resources boom.

A more comprehensive approach to policy settings for investment in, and management of, rental housing is necessary to address a worsening situation which, if left unchecked, could lead to greater housing instability and homelessness with consequent economic and social costs for individuals/households and governments.

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