Unaffordable rents no longer just a city problem as crisis engulfs regions

Australia’s brutal rent crisis is spreading as affordable space moves from cities to regional parts of the country.

New figures from National Shelter, SGS Economics and Planning and Housing All Australia show affordability in Perth and regional Australia has fallen over the past 12 months.

SGS Economic Planning director Ellen Witte told NewsWire that rent affordability was no longer an issue for traditional inner-city suburbs in Sydney and Melbourne.

“For years rent affordability was only in the cities, but as time went on and the crisis deepened we saw it spread to the suburbs, the outer suburbs and now very regional areas,” he said.

Ms Witte said regional areas were suffering as city residents left for cheaper accommodation.

“Although the number of people leaving the cities is not huge, for a regional town it has really changed the rental market,” he said.

The trend likely started during the Covid-19 pandemic, according to Ms Witte, but a lack of census data has made it difficult to confirm whether Australians are making changes to the sea or the trees.

“People can easily work remotely, and what you see is people in cities moving their urban incomes and purchasing power to the regions to afford higher rents, which raises prices while also creating more demand for housing in regional areas.”

Using the example of Victoria, Ms Witte said the income gap compared regionally to a person living in Melbourne was 25 per cent, while workers in Sydney and NSW earned about 28 per cent more than those living in the region.

Ultimately, this gap in wages and low vacancy rates drives prices up, Ms. Witte said.

He said the affordability crisis was also affecting the rest of Australia.

“It affects the productivity of the country,” Ms. Witte said.

“We are increasingly seeing that workplaces may not be able to fill vacancies because workers want the job, but they may not be able to fill that role if they can’t find a place to live.”

While rural and regional Australia are struggling, a mixed picture is emerging for cities.

Sydney’s affordability increased by 1 per cent and Canberra’s by 4 per cent, while it remained stable in Melbourne and Adelaide.

Hobart, Brisbane and Perth fell by 1, 2 and 4 per cent respectively.

Although affordability has stabilized in many urban areas, the report found that rents remain unaffordable in large parts of the country, even for full-time staff.

A full-time hospitality worker must spend more than 30 percent of their income on rent in most capital cities and the rest of the state.

“From cafes to hotels, hospitals to childcare centres, businesses across Australia are struggling to find staff because there is no affordable place for them to live nearby,” said Robert Pradolin, founder of Housing All Australians.

“Housing people can afford is an absolutely critical economic infrastructure, without which our national prosperity and productivity take a backseat.”

The report said Australia needs to build 44,500 social and affordable homes every year for the next two decades to solve its housing problem.