ACT ranked second least affordable rent in Australia

Canberra's rent is among the least affordable in the nation.Canberra's rent is among the least affordable in the nation. Photo: Kaique Rocha

A new Rental Affordability Index (RAI) report, released today by SGS Economics and Planning, labelled ACT’s overall RAI as acceptable to the average income. However, for vulnerable groups Canberra’s rent is ranked second least affordable in the nation.

Senior associate and partner of SGS Economics and Planning, Ellen Witte, described the ACT as “a city of two faces”.

“What we see in Canberra more than any other city in Australia is that the average income level is very high,” she explained.

RAI for single pensioner householdRAI for single pensioner household Photo: SGS Economics and Planning

“For high-income earners rents are very affordable, but it pushes the average price up. The bottom end of the market is really struggling to pay rent.”

The report calculates rental affordability by dividing the median income by the qualifying income. An RAI score of 100 or below indicates that households are paying more than 30 per cent of their income on rent and are at a critical threshold level for housing stress.

This affects a household’s ability to pay for primary needs such food, power, water, transport and household goods.

RAI ranking for single person on benefitsRAI ranking for single person on benefits Photo: SGS Economics and Planning

Pensioners in the ACT are faced with the second least affordable rent in the country with single pensioners paying 73 per cent rent as a share of income – almost three-quarters of their earnings.

“Rent in the ACT is completely out of range for anyone who is on welfare,” Council on the Ageing ACT Housing Options Advisor, Trish Low, added.

“The rental crisis here is hidden because the general perception seems to be we have an average affordability, but there’s so many people below that perceived average, including pensioners.”

The ACT also has the second least affordable rent in the nation for a single person on benefits, single part-time worker parent on benefits and student sharehouse. All above 30 per cent rent as share of income.

The report described the housing situation for a single person on benefits as “untenable”, with a person of this household type needing to pay at least 60 per cent of his/her income on rent across all metropolitan areas.

Alarmingly, ACT is classified as “extremely unaffordable” in this profile, sitting at 111 per cent rent as a share of income.

Principal solicitor of the Tenants’ Union ACT, Charlie Faulder, said you have to forego a lot to be able to afford rent in Canberra.

“For vulnerable groups, the ACT is completely unaffordable. We’re basically worse off than just about everywhere else, we’re even managing to outdo greater Melbourne,” she said.

“For single people on benefits, unless you can get into social housing you are essentially unable to afford to rent independently in Canberra.”

The report also shows that the ACT is the least affordable place in Australia to rent for a dual income couples with children, spending 14 per cent of their income on rent, tied with greater Sydney.

Jodie Sauer and her husband David know the pressures of renting in the ACT.

“Renting puts a lot of pressure on your budget, if David and I were to have another child we would definitely have to look at moving to somewhere bigger which would then put a bigger hole out of our fortnightly pay,” she said.

The couple lives with their daughter, Matilda, in a three-bedroom townhouse in Casey and they pay roughly $1000 per fortnight. Jodie believes it could take them up to five years to purchase a house.

“If we were to actually keep living and renting and trying to save for a house and then also pay for childcare we would probably have to save for the next five years.”