Rent too damn high - but why? Less than 1% of Sydney rental properties affordable on low incomes; Sydney's high rents force many low earners into rental stress
Tweet Topic Started: 29 Apr 2013, 08:50 AM (5,140 Views)
Less than 1 per cent of private rental properties in Sydney are affordable for people on low incomes or social security benefits, according to research from a leading welfare group.
Anglicare Sydney analysed the cost of 12,880 properties for rent in greater Sydney this month and found only 23 were affordable for people on welfare benefits.
Those on low incomes did not fare much better with only 208 properties affordable and suitable for families with both adults earning the minimum wage.
Only 34 properties were affordable for singles on the minimum wage and only five for single parents earning the minimum wage.
Anglicare Sydney chief executive Grant Millard said the research showed low income earners had been priced out of the private rental market in Sydney.
"Anglicare Sydney is concerned that low-income households are becoming increasingly marginalised and excluded from opportunities for a better and more secure future," he said.
The Rental Affordability Snapshot, released on Monday, showed there were no affordable properties for single people on the Newstart allowance and only two affordable properties for couples on Newstart with children.
Other groups on welfare benefits had severely limited options with nothing affordable for single people on the youth allowance, two properties for people on the disability support pension, two properties for single parents on the parenting payment and five for singles on the age pension. The report defined affordable properties as those costing 30 per cent or less of the household's income.
Mr Millard said Sydney's high rents had forced many low earners into rental stress, where they were paying 45 per cent or more of their income on accommodation. "It's a very depressing scenario for low-income earners and those living on government support," he said.
"If they are waiting for social housing, they have an awfully long wait and in that time they could either be on the brink of homelessness or end up experiencing homelessness."
Demand for public housing is high with data from Housing NSW showing a two-year wait for any properties in Sydney and a five-year wait for homes in central Sydney.
Keen followers of rental related reporting will have noticed some pretty dire headlines over the last couple of days. The ABC screams "Mission impossible for low income renters", the Sydney Morning Herald yells "Poor priced out of Sydney rental market", while The Australian exclaims "Dearth of housing for the poor".
Why is my rent going up again?
Some regional papers have jumped in, too, with reports from Broken Hill, the Riverina and the Hunter Valley that high rents have made headlines locally.
The Daily Telegraph offers a slightly more subdued "Anglicare rental affordability report shows welfare recipient struggle to find housing", which gives us a clue as to what all this is about - Anglicare Australia has just released it's Rental Affordability Snapshot for 2013. The news is not good.
We wont go into the headline findings - they've been covered pretty well by the papers. Suffice to say that if you're on a low income - like a Centrelink payment, or a wage from a part-time job - your chances of finding something decent to rent in the private rental market are pretty slim. Well, almost non-existent, actually. This is not just in Sydney, it's across New South Wales, and it's across the country.
For keen followers of rental related reporting this should come as no great surprise, even if it does fly a little in the face of current reporting conventions. We already know the rent is too damn high. It's kind of nice to think that others are getting this message - at least for a day or two - thanks to the work of Anglicare Australia. But it's a shame that the conversation tends to stop there. Who is asking the next question: why is the rent so high? And what happens to those of us who can't afford it?
As it happens, we were in attendance at the recent Shelter NSW conference "Hot Topics in Housing Policy", where one Emilio Ferrer of Sphere delivered a presentation called "The Private Rental Market - Affordability and Homelessness". Ferrer observes a correlation between rising rates of people seeking to access homelessness services, and rising rents in the private rental market. He says that these rises are not the product of economic indicators such as GDP, unemployment or wage growth. Nor are they the result of a decline in the availability of social housing properties. Instead, he says, they are the result of chronic underinvestment in housing supply by the private sector, which has resulted in a consistently low vacancy rate over several years.
"The effect of this on tenants," he suggests, "is that it's a landlord's market. Some tenants are priced out of the market, and some tenants are selected out of the market". By this he means that it becomes easier for landlords to pick and choose tenants, because when vacancies are low, competition is high, and the pool of applicants for an affordable property will be much larger. Applications from those with lower incomes will be some of the first to hit the culling room floor.
You can find the slides from Ferrer's presentation (as well as others from the conference) here. We think he's pretty much on the money. As we've alluded to before, current policies that are said to encourage private investment in rental housing just aren't producing enough new stock. According to Ferrer's data, it doesn't even come close - in order to get back on track we'd need to build about twice the number of new dwellings than were built in 2011/12, every year, for the next twelve years.
But there's something else to consider here. Not every tenant who finds their options limited by what they can afford ends up homeless. As we said in this previous post:
In the real world, of course, people do consider the affordability of housing when they decide whether to leave the parental home, or the share house, and form a household of their own, and demand some housing – owner-occupied or rented – of their own. And some of those already out there in the housing market might look again at its affordability, and decide to withdraw, back to the spare rooms of parents and friends.
It's a curious balance. The answer is not just to "build more homes", but to build more homes that people can afford. This will call for a range of policy solutions - indeed, we should be looking at an entire national housing strategy - and as Anglicare's Andrew Yule has said following the release of the Rental Affordability Snapshot yesterday: let's not let this fall off the agenda.
Perhaps it's time the church started paying taxes or perhaps sold down some of their multi million dollar property portfolios if they really are that concerned for the welfare of the poor.
Ignore posts by The Whole Truth · View Post · End Ignoring The forum fuckwit goes RRRAAARRRGGHHhhh - But not a fuck was given..................by anyone.
Perhaps it's time the church started paying taxes or perhaps sold down some of their multi million dollar property portfolios if they really are that concerned for the welfare of the poor.
Yeah, because thats exactly what this thread is about.
Property acquisition as a topic was almost a national obsession. You couldn't even call it speculation as the buyers all presumed the price of property could only go up. That’s why we use the word obsession. Ordinary people were buying properties for their young children who had not even left school assuming they would not be able to afford property of their own when they left college- Klaus Regling on Ireland. Sound familiar?
The evidence of nearly 40 cycles in house prices for 17 OECD economies since 1970 shows that real house prices typically give up about 70 per cent of their rise in the subsequent fall, and that these falls occur slowly. Morgan Kelly:On the Likely Extent of Falls in Irish House Prices, 2007
Perhaps it's time the church started paying taxes or perhaps sold down some of their multi million dollar property portfolios if they really are that concerned for the welfare of the poor.
Yeh, the Anglican church's UK parent, the Church of England, had an investment portfolio in 2006 of £4.3 billion and made a return of 19.1%. The portfolio includes stuff like shopping centres, industrial estates and flogging car parking spaces in London's West End on 99 year leases for millions. I suppose they do that rather than focus on churches because its more profitable.
So nothing on the actual findings of the report no? Just mud slinging at Anglicare
Property acquisition as a topic was almost a national obsession. You couldn't even call it speculation as the buyers all presumed the price of property could only go up. That’s why we use the word obsession. Ordinary people were buying properties for their young children who had not even left school assuming they would not be able to afford property of their own when they left college- Klaus Regling on Ireland. Sound familiar?
The evidence of nearly 40 cycles in house prices for 17 OECD economies since 1970 shows that real house prices typically give up about 70 per cent of their rise in the subsequent fall, and that these falls occur slowly. Morgan Kelly:On the Likely Extent of Falls in Irish House Prices, 2007
I was expecting Shadow and co tell us that low income earners should be content to share a house with 10 others, 100km from the CBD and that they are overentitled whingers.
I was expecting Shadow and co tell us that low income earners should be content to share a house with 10 others, 100km from the CBD and that they are overentitled whingers.
This is a global problem as cities grow property, close to the centre, increases in price. I am sure London, Tokyo, Hong Kong etc have all got worse problems than us when it comes to providing affordable housing for vital lower paid workers. The following is average major city centre rental prices from Global property guide UK $8579.83 Monaco $8316.90 Japan $6,750 Hong Kong $6,328 USA $6,286 Russia $6200.39 France $5751.72 Switzerland $4843.89 Singapore $4,817 Brazil $3,916 Australia $3,592 Italy $3346.12 Finland $3296.41 Canada $3,047 India $3,031 South Korea $2,675
Relative to many countries our rents are not so expensive, my view is that this is to do with the large numbers of small property investors here who do not always maximise their rental returns in the same way larger property investors would.
I do agree that we need affordable property for key public service staff - I favor scrapping all FHB incentives and putting that money into a fund for public service workers such as nurses, paramedics teachers, police etc. IMHO, It is ridiculous to give taxpayers money to everyone who wants to buy their first home regardless of their income.
Definition of a doom and gloomer from 1993 The last camp is made up of the doom-and-gloomers. Their slogan is "it's the end of the world as we know it". Right now they are convinced that debt is the evil responsible for all our economic woes and must be eliminated at all cost. Many doom-and-gloomers believe that unprecedented debt levels mean that we are on the precipice of a worse crisis than the Great Depression. The doom-and-gloomers hang on the latest series of negative economic data.
This is a global problem as cities grow property, close to the centre, increases in price. I am sure London, Tokyo, Hong Kong etc have all got worse problems than us when it comes to providing affordable housing for vital lower paid workers. The following is average major city centre rental prices from Global property guide UK $8579.83 Monaco $8316.90 Japan $6,750 Hong Kong $6,328 USA $6,286 Russia $6200.39 France $5751.72 Switzerland $4843.89 Singapore $4,817 Brazil $3,916 Australia $3,592 Italy $3346.12 Finland $3296.41 Canada $3,047 India $3,031 South Korea $2,675
Relative to many countries our rents are not so expensive, my view is that this is to do with the large numbers of small property investors here who do not always maximise their rental returns in the same way larger property investors would.
I do agree that we need affordable property for key public service staff - I favor scrapping all FHB incentives and putting that money into a fund for public service workers such as nurses, paramedics teachers, police etc. IMHO, It is ridiculous to give taxpayers money to everyone who wants to buy their first home regardless of their income.
I am surprised that you think this is a "problem". Surely you want higher and higher rents when you be "collecting da rent"?
The numbers don't add up. What is a "major city"? What proportion residents live in so called "major cities" in each country?
The UK number compared to Aus is absolute codswallop and in no way reflects reality or the plight of the low paid worker.
Australian Property Forum is an economics and finance forum dedicated to discussion of Australian and global real estate markets and macroeconomics, including house prices, housing affordability, and the likelihood of a property crash. Is there an Australian housing bubble? Will house prices crash, boom or stagnate? Is the Australian property market a pyramid scheme or Ponzi scheme? Can house prices really rise forever? These are the questions we address on Australian Property Forum, the premier real estate site for property bears, bulls, investors, and speculators. Members may also discuss matters related to finance, modern monetary theory (MMT), debt deflation, cryptocurrencies like Bitcoin Ethereum and Ripple, property investing, landlords, tenants, debt consolidation, reverse home equity loans, the housing shortage, negative gearing, capital gains tax, land tax and macro prudential regulation.
Forum Rules:
The main forum may be used to discuss property, politics, economics and finance, precious metals, crypto currency, debt management, generational divides, climate change, sustainability, alternative energy, environmental topics, human rights or social justice issues, and other topics on a case by case basis. Topics unsuitable for the main forum may be discussed in the lounge. You agree you won't use this forum to post material that is illegal, private, defamatory, pornographic, excessively abusive or profane, threatening, or invasive of another forum member's privacy. Don't post NSFW content. Racist or ethnic slurs and homophobic comments aren't tolerated. Accusing forum members of serious crimes is not permitted. Accusations, attacks, abuse or threats, litigious or otherwise, directed against the forum or forum administrators aren't tolerated and will result in immediate suspension of your account for a number of days depending on the severity of the attack. No spamming or advertising in the main forum. Spamming includes repeating the same message over and over again within a short period of time. Don't post ALL CAPS thread titles. The Advertising and Promotion Subforum may be used to promote your Australian property related business or service. Active members of the forum who contribute regularly to main forum discussions may also include a link to their product or service in their signature block. Members are limited to one actively posting account each. A secondary account may be used solely for the purpose of maintaining a blog as long as that account no longer posts in threads. Any member who believes another member has violated these rules may report the offending post using the report button.
Australian Property Forum complies with ASIC Regulatory Guide 162 regarding Internet Discussion Sites. Australian Property Forum is not a provider of financial advice. Australian Property Forum does not in any way endorse the views and opinions of its members, nor does it vouch for for the accuracy or authenticity of their posts. It is not permitted for any Australian Property Forum member to post in the role of a licensed financial advisor or to post as the representative of a financial advisor. It is not permitted for Australian Property Forum members to ask for or offer specific buy, sell or hold recommendations on particular stocks, as a response to a request of this nature may be considered the provision of financial advice.
Views expressed on this forum are not representative of the forum owners. The forum owners are not liable or responsible for comments posted. Information posted does not constitute financial or legal advice. The forum owners accept no liability for information posted, nor for consequences of actions taken on the basis of that information. By visiting or using this forum, members and guests agree to be bound by the Zetaboards Terms of Use.
This site may contain copyright material (i.e. attributed snippets from online news reports), the use of which has not always been specifically authorized by the copyright owner. Such content is posted to advance understanding of environmental, political, human rights, economic, democratic, scientific, and social justice issues. This constitutes 'fair use' of such copyright material as provided for in section 107 of US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed for research and educational purposes only. If you wish to use this material for purposes that go beyond 'fair use', you must obtain permission from the copyright owner. Such material is credited to the true owner or licensee. We will remove from the forum any such material upon the request of the owners of the copyright of said material, as we claim no credit for such material.
Privacy Policy: Australian Property Forum uses third party advertising companies to serve ads when you visit our site. These third party advertising companies may collect and use information about your visits to Australian Property Forum as well as other web sites in order to provide advertisements about goods and services of interest to you. If you would like more information about this practice and to know your choices about not having this information used by these companies, click here: Google Advertising Privacy FAQ
Australian Property Forum is hosted by Zetaboards. Please refer also to the Zetaboards Privacy Policy
