TENANTS, like buyers, are facing affordability issues, with a study finding limited rental opportunities in the private sector for low-income households.
Housing Affordability (Rental) – a study for the Perth metropolitan area looked at rental affordability for households on very low (less than $43,000), low ($43,000-$69,000) and moderate incomes ($69,000-$103,000).
The study was a collaboration between the Housing Authority, Real Estate Institute of WA (REIWA) and Shelter WA.
While 35 per cent of private rental households were very low or low-income, only 19 per cent of private rentals were affordable to this group, meaning many were living in housing stress or inappropriate housing.
Of the 52,277 private rentals reported to reiwa.com during the 2015-16 financial year, only 3 per cent were affordable to those on very low incomes.
Although Perth’s rental market had been in a cyclical downswing for the past few years, Housing Authority general manager strategy and policy Tania Loosely-Smith said there was still a significant shortage of affordable housing for West Australians on low incomes.
“By a range of measures, this shortage has entrenched over decades and deepened in the last 10 years,” she said.
“It affects our vulnerable citizens, as well as the key workers who are the backbone of our economy.
“The Housing Authority is committed to addressing these challenges in order to ensure WA families, our local communities and our economy thrive.
“That said, achieving these outcomes needs both Commonwealth and State leadership.”
Ms Loosley-Smith said she welcomed the Commonwealth Government’s commitment to establish a National Housing Finance and Investment Corporation and its focus on models to increase affordable rentals for people on low incomes.
“Large-scale market investment in our rental sector, particularly at the affordable end of the market, is the missing part of the Australian housing continuum and can only be tackled effectively at a national level,” she said.
“This, combined with ongoing funding for the social housing system under the National Affordable Housing Agreement and ongoing State efforts on housing supply and diversity, is critical to ensuring that all Western Australians have a place to call home.”
Perth’s central sub-region, which includes Bassendean/|Bayswater, Belmont, Canning, Fremantle, Melville, Perth City, South Perth/Victoria Park, Stirling East and West, Vincent/Stirling South East and the western suburbs planning regions, contained the bulk of affordable rental housing in Perth.
While it provided 65 per cent of affordable housing for very low-income earners and 49 per cent for low-income earners, only 4 per cent of rentals in the sub-region were affordable for very low-income households and 1`5 per cent were affordable to low-income households.
For very low- income households in the sub-region, the largest proportion (19 per cent) of affordable rentals was in the South Perth/Victoria Park region.
For low-income and low- income upper ($56,000-$69,000) households, the largest proportion of affordable rentals (20 per cent) was in Stirling East.
About 18 per cent of rentals affordable for moderate income households were in Perth City.
A lack of diversity is contributing to affordability issues; the report found the Perth rental market was heavily weighted towards larger properties, with more than 70 per cent of rentals having three bedrooms or more.
However, only 13 per cent of properties affordable to those on very low incomes had three or more bedrooms.
For low-income households, it was 43 per cent of affordable properties.
Smaller properties (two bedrooms or less) were concentrated in the central sub-region, where more than 80 per cent of two bedroom or less properties in Perth were located.
REIWA president Hayden Groves said housing affordability was a critical issue for West Australians and the report emphasised the glaring need for a greater emphasis on the provision of affordable, accessible and appropriate housing options.
“It is clear that the current stock of private rental accommodation does not meet the needs of our community and more needs to be done to address
the requirement for choice and housing diversity,” he said.
“The planning system needs to mandate and address housing diversity within the WA planning system.”