Rental stress drives up poverty

(Australian Associated Press)


Some Australians who lost their jobs during the coronavirus pandemic are paying close to 70 per cent of their income in rent.

Analysts warn there is not one State in Australia where a Jobseeker recipient can now rent affordably and there are dire warnings of a looming rise in homelessness.

The latest Rental Affordability Index, released yearly by a consortium including banks, the Brotherhood of St Laurence and National Shelter, paints a bleak picture for jobless renters.

The index, which examined the period to June 2020, looks at the impact of the early COVID-19 payments.

It finds that while the JobSeeker supplement improved rental affordability for Newstart households across the country, recipients are still facing moderate to extreme rental stress.

Hobart was the least affordable city, followed by Adelaide. Other cities were not so hard hit, mainly due to the fact that the coronavirus pushed rents down.

And whilst the JobSeeker payment helped those who were already on Newstart, new JobSeeker recipients face extreme pressure, paying between 42 to 69 per cent of their income in rent in every capital city.

The JobSeeker payment replaced Newstart in March 2020.

Ellen White, partner at SGS Economics and Planning, which is part of the index, says many households now face being trapped in a poverty cycle, with fewer jobs and people moving further out of cities chasing cheaper rents but also away from jobs and services.

She said the market was responding to the inability of JobSeeker recipients to pay high rents by lowering rental prices.

Between March and June 2020, rents fell two to seven per cent nationwide.

Brotherhood of St Laurence research and policy centre director, Professor Shelley Mallett, says despite additional support from the JobSeeker Supplement, many Australians are facing severe rental affordability.

“Rental stress has become so entrenched and severe for low-income households that the JobSeeker supplement has brought little relief, with the situation for most low-income households in these metropolitan areas remaining untenable,” Professor Mallett says.

“We can expect that the September reduction to JobSeeker will further increase rental stress and disparities of this cohort. Coupled with the economy not re-creating jobs and a relatively high unemployment rate, many households are being trapped in a poverty cycle.”

Least affordable postcodes in Sydney

– Seaforth

– Belrose, Belrose West

– Frenchs Forest

– Forestville, Killarney Heights

– Darling Point, Edgecliff, Point Piper

Least affordable postcodes in Melbourne

– Brighton East

– Brighton

– Albert Park, Middle Park

– Balwyn North

– Hampton


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