Renters’ hip pockets hit hard
RENTS in Coffs Harbour are officially considered unaffordable for the average renting household, according to Australia's first Rental Affordability Index.
The Index reveals the depth and extremity of housing stress faced by renters across the country.
It found both low- and moderate-income households are suffering poverty due to the high rental costs.
Housing stress occurs when households pay 30% of their income or more on rent.
The Coffs Harbour local government area returned a Rental Affordability Index of 94.
This is considered to be unaffordable for the average household in the current market conditions.
The index found the average renting household in Coffs Harbour is expected to contribute 32% of their household income to rent payments under current market conditions.
Rents on the Coffs Coast from Corindi to Sawtell were significantly higher than areas such as Urunga, Bellingen and Grafton.
Scores of 100 and less on the index indicate that rents are at such a level that they negatively impact on a household's ability to pay for other primary needs such as food, medical requirements and education.
The Rental Affordability Index has been created by National Shelter, Community Sector Banking and SGS Economics & Planning, and it will be released on a quarterly basis.
National Shelter's Adrian Pisarski said rental unaffordability was dividing Australia in a big way.
"Australia's rental market is growing, and where once Australia had an owner-occupation rate of 70%, it is now closer to 65% and declining. This report shows housing affordability is a much bigger problem for renters than owner-occupiers."
Mr Pisarski said the report was designed to fill a gap in available data on rental affordability and focus attention on the need to reform the rental system.
"Rental stress is a drag on productivity, is increasing poverty and breaking down social cohesion. We must be able to achieve multi-party support on such a critical issue," he said.
The report reveals NSW low-income families on $500 a week would have to spend 65% of their income to rent a property under current market conditions.
Community Sector Banking's Joe Sheehan said Australia now needed to build 180,000 new affordable houses every year simply to keep up.
"That is not happening," he said. "Data shows the cost of an average first home mortgage has jumped in the past decade from 44% of a worker's wage to 61%."
Mr Sheehan said stimulating institutional investment into affordable housing was now critical.
"There is now every chance your children may never own their own home. It is a dismal outlook," Mr Sheehan said.
"There has been a massive jump in the number of Australians experiencing housing stress. It is time for serious action."