In the past 30 months median rent values have shot up as much as they have over the previous 16 years. The numbers are eye-watering with prices going up faster than inflation and wages. And with vacancy rates at all-time lows for a growing number of Australians even finding a place available has become a struggle.
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TVTranscript
00:00 For most of us, whether we own or rent, the home we live in is our single biggest expense.
00:08 An expense that keeps getting more and more, well, expensive.
00:12 Are they going to keep me on?
00:14 Am I going to get a rent increase?
00:15 What's going to happen?
00:16 Unfortunately, I have been encouraged to put up the rent.
00:20 There is no doubt right now we are in a rental crisis.
00:24 In the last couple of years, the cost of renting nationally has spiked.
00:30 Eye-watering numbers going up faster than inflation and wages.
00:34 The prices just keep going up.
00:36 A lot of them feel like you don't have a chance.
00:38 There's an often used rule for assessing rental affordability, especially for low-income families.
00:44 You want to spend less than 30% of your income on rent.
00:48 Take a look at this chart. Here's the 30% rule and it shows us that rental affordability has been deteriorating.
00:56 Things weren't great a decade ago, but the typical portion of income needed to pay the rent slowly fell through the decade.
01:03 But this is the shock of the pandemic. It's back above our 30% threshold.
01:09 I've been in the industry for 30 years and I've never seen a housing affordability crisis as bad as what we're experiencing right now.
01:16 The pandemic forced a lot of us to re-evaluate how we live and who we live with.
01:21 Being in a share house in such a stressful environment can really take a toll.
01:27 Relatively quickly, the average number of people living in each house fell to 2.5.
01:33 That might not sound massive, but the Reserve Bank says it led to 120,000 new households being created.
01:40 We haven't been able to build houses quickly enough, particularly at the affordable and social end of the housing spectrum.
01:47 So there's a lot in the construction pipeline right now, but when that's done, when that's complete, I think you're facing a bit of a vacuum of new projects for 2024.
01:56 There's something else we should consider. Who is supplying rental properties into the market?
02:01 We need to stop being so reliant on just mum and dad investors to supply the rental stock.
02:06 That's why we need more social and affordable housing from governments.
02:09 Social housing owned by Australian governments and designed to be affordable and stable for lower income people used to make up a bigger share of Australia's housing stock.
02:21 But over time, states and territories have withdrawn from the market.
02:25 So if you look at dwelling approvals and the portion of those dwellings that are government owned, it's come down from about 8 or 9 per cent in the 80s and 90s to less than 2 per cent today.
02:38 There's broad agreement from renters, landlords and real estate agents that something has to change.
02:44 The pandemic really brought on a period of great change and exacerbated a lot of these problems. So this has been a long time coming, really.
02:54 What that something is, they don't agree.
02:57 But renters have shown they have electoral power and that's helped push ideas like renters' rights, planning rules and rent price caps into the mainstream.
03:08 But of course, there's no silver bullet here. It will be a mix of different ideas that help correct the market.
03:15 Just like a home, drawing up the plans is one thing. Turning them into something concrete is much harder.
03:23 [BLANK_AUDIO]