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Regional renters forced to spend more of their income than ever before
Renters in regional areas are spending nearly as much on rent as home owners are spending on mortgage repayments.
Regional renters forced to spend more of their income than ever before
Renters in regional areas are spending nearly as much on rent as home owners are spending on mortgage repayments.
Rental affordability has reached a record low in regional areas after the post-pandemic recovery and flexible work arrangements led to a surge in demand.
The latest ANZ CoreLogic Housing Affordability report indicated that regional renters spent 34.0 per cent of their income on rent while those in capital cities spent 28.0 per cent during the March quarter.
“The cost of renting is now almost on par with the cost of buying in regional Australia and in some ‘lifestyle’ markets people are spending more than half their income on rent,” said CoreLogic head of Australian research Eliza Owen.
In comparison, the two firms found that the portion of income required to service a new mortgage in regional areas was 38.3 per cent.
Nationally, the share of household income needed to service rent on a new lease reached 30.6 per cent, increasing from 29.8 per cent as of December last year and 28.5 per cent in the March quarter of 2020.
New record highs were reached in both Hobart (34.4 per cent) and Adelaide (31.6 per cent) during the latest quarter, above both Sydney (30.5 per cent) and Melbourne (24.3 per cent).
“Rental affordability conditions vary markedly between regions,” the report said.
“Relatively weak rental market conditions across Sydney and Melbourne, especially across the unit sector through the first year of the pandemic, meant the level of income required to service rent on a new lease has actually fallen in these cities since March 2020.”
Ms Owen said that rental affordability has deteriorated most rapidly in the Richmond - Tweed region of NSW that includes Byron Bay.
“The portion of income required to pay rent on a new lease increased to 53 per cent in March 2022 from 45 per cent two years prior,” she noted.
The next biggest increase was seen in the Southern Highlands and Shoalhaven in NSW, up 7.8 percentage points to 46.4 per cent, followed by increases of 6.7 percentage points for both the NSW Mid North Coast (46.3 per cent) and Coffs Harbour - Grafton (48.6 per cent).
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