Report finds only THREE rentals in Australia are affordable for JobSeekers

author-avatar By on April 29, 2021
Report finds only THREE rentals in Australia are affordable for JobSeekers

The rental crisis is even more dire for some than it was before COVID, as low-income renters face a market that has never been less affordable.

Only three rental properties in the country are considered affordable for a single person on JobSeeker, a new report has found.

Anglicare Australia's annual Rental Affordability Snapshot of more than 74,000 rental listings across Australia on realestate.com.au revealed the rental crisis has become "dire" for people on low incomes.

Of the three rental properties that were considered affordable for JobSeeker recipients, all were share-houses in Brisbane, Perth and the NSW Riverina region. 

There were no affordable rental properties in Australia for people receiving Youth Allowance.

The federal government lifted the permanent rate of JobSeeker, formerly known as Newstart, by $50 a fortnight in April.

But at the same time, the temporary Coronavirus supplement was scrapped, so most welfare payments actually fell by around $100 a fortnight, leaving recipients worse off.

“The ‘new’ rate of JobSeeker is so low that it hasn’t made a dent in affordability," said Anglicare Australia Executive Director Kasy Chambers.

"There are even fewer affordable rentals now than there were on the old rate of Newstart."


Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.

Lender
Advertised rate Comparison rate Monthly repayment Rate TypeOffsetRedrawOngoing FeeUpfront FeesLVRLump Sum RepaymentAdditional RepaymentsPre-approval

VariableMore details
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
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Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
VariableMore details
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
VariableMore details
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • Refinance only. Fast online application
  • No Nano fees. Free 100% offset sub account
  • Mobile app, Visa debit card & instant payments
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • Refinance only. Fast online application
  • No Nano fees. Free 100% offset sub account
  • Mobile app, Visa debit card & instant payments
VariableMore details
YOU COULD WIN $100k TO PAY DOWN YOUR LOAN*

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • For a chance to win $100K towards your home loan, apply with Athena before Oct 31 & be approved by Dec 15
  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
YOU COULD WIN $100k TO PAY DOWN YOUR LOAN*

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • For a chance to win $100K towards your home loan, apply with Athena before Oct 31 & be approved by Dec 15
  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
VariableMore details
AN EASY ONLINE APPLICATION

Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^
AN EASY ONLINE APPLICATION

Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^

Rates correct as of October 28, 2021. View disclaimer.


In April last year, Anglicare found 1,040 of the 69,960 homes surveyed were affordable for a single person on JobSeeker with the Coronavirus supplement.

Without the Coronavirus supplement, only nine homes would have been affordable then.

“Each year, we think the market couldn’t get any worse. And each year, we're shocked to see that it can," Ms Chambers said.

"That’s why we need to lift JobSeeker and other payments above the poverty line.

"If we don’t, people out of work will be pushed deeper into housing stress and even homelessness."

Read more: JobSeeker recipients spending up to 69% of their income on rent

The analysis used the common benchmark of spending no more than 30% of your gross (pre-tax) income on rent repayments for housing to be considered 'affordable'. 

Any more is considered to be in rental or mortgage stress

The situation was only slightly better for other income recipients.

For example, the report found there were 386 affordable rental properties for a single person on the Age Pension. 

"The most generous of government payments is the Age Pension. Yet for a couple living on the Age Pension, only 2% of rentals were affordable," Ms Chambers said.

"Single retirees have it even worse, with less than 1% of listings left to compete for."

Meanwhile, a single person on the Disability Support Pension would have to battle it out for just 236 affordable rentals.

Ms Chambers said one of the most concerning trends in this year's snapshot has been the fall in affordable rental properties for people earning the minimum wage.

“People who have kept their jobs are hardly better off. A person on the minimum wage can afford just 1% of rentals – less than half of what was available last year," she said. 

"The recovery is leaving too many people behind.”

Even families with two parents in full-time work would find themselves locked out of 85% of rentals surveyed in the snapshot.

Read more: What's in store for struggling renters in 2021?

Ms Chambers called on Treasurer Josh Frydenberg to tackle the issue of housing affordability for low-income renters in the upcoming Budget.

“We need to invest in affordable housing. Our shortfall is massive. We need 500,000 new social and affordable rentals across Australia," she said.

“Investing in housing would be the most powerful way to tackle the rental crisis – and boost regional economies after a tough year.

“We’re calling on the government to take action in the next Budget – and make sure everyone has a place to call home."

Rents increasing in most capital cities 

From March 2020 to 2021, median house rents increased by 4% nationally to $471 per week, according to Domain's latest rental report. 

Units meanwhile are becoming more affordable, with the median rent plummeting 8.1%, although this was largely driven by Sydney and Melbourne. 

Units rents rose in every other capital city, except for Darwin where prices remained stagnant. 

Perth rental properties for example saw a 14.1% yearly increase in rental prices. 

Income support payments, such as JobSeeker and Rent Assistance (CRA) have not kept pace with recent increases


Photo by Finn Whelen on Unsplash

Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:

  • The big four banks are: ANZ, CBA, NAB and Westpac
  • The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2020. They are (in descending order): Great Southern Bank, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
  • The larger non-bank lenders are those who (in 2020) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.
  • If you click on a product link and you are referred to a Product or Service Provider’s web page, it is highly likely that a commercial relationship exists between that Product or Service Provider and Savings.com.au

Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site.

In the interests of full disclosure, Savings.com.au, Performance Drive and Loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.

*Comparison rate is based on a loan of $150,000 over a term of 25 years. Please note the comparison rate only applies to the examples given. Different loan amounts and terms will result in different comparison rates. Costs such as redraw fees and costs savings, such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.

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Emma Duffy is Assistant Editor at Your Mortgage and  Your Investment Property Mag, which are part of the Savings Media Group. In this role, she manages a team of journalists and expert contributors committed to keeping readers informed about the latest home loan and finance news and trends, as well as providing in-depth property guides. She is also a finance journalist at Savings.com.au which she joined shortly after its launch in early 2019. Emma has a Bachelor in Journalism and has been published in several other publications and been featured on radio.

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