Wednesday, April 30, 2014

Anglicare's Rental Affordability Snapshot 2014

Anglicare's Rental Affordability Snapshot for 2014 is out today. It looks at the 62 862 rental properties across Australia advertised to let on a typical Saturday last month, and considers whether the rents are affordable for low-income households (that is, rent's not more than 30 per cent of income). The picture is grim.

Some 'highlights':
  • for single persons on Youth Allowance, just six properties (0.0001 per cent – let's call it zero) were affordable;
  • for single persons on Newstart, just 25 properties (0.0004 per cent – let's call it zero) were affordable;
  • for single persons on the Disability Support Pension, just 316 properties (0.5 per cent) were affordable;
  • for single Age Pensioners, just 625 properties (one per cent) were affordable;
  • for single parents with two kids (on Parenting Payment Single), just 533 properties (0.8 per cent) were affordable;
  • for a couple with two kids (on Newstart), just 883 properties (1.4 per cent) were affordable.
It's bleak for low-income workers too:
  • for single persons on the minimum wage, just 2 545 properties (four per cent) were affordable;
  • for a single parent with two kids, on the minimum wage and receiving Family Tax Benefits, just 1 992 properties (3.2 per cent) were affordable;
  • for a couple with two kids, on the minimum wage and FTB, just 7 639 properties (12.2 per cent) were affordable. 
This is the real housing supply problem in Australia: the lack of affordable rental for people on low incomes.

This is what happens when speculation takes over the housing market: the shape of the rental market is distorted. Higher-income households are priced out of owner-occupation and into competition with low-income households for rental properties; and higher-value (and hence higher rent) properties are brought into the rental sector by speculator landlords, while low-value (and hence more affordably rented) properties are allowed to pass out of the sector.

And this is what happens when governments positively encourage housing speculation: by not taxing housing held by owner-occupiers; by not taxing negatively geared landlords for income spent on financing their speculation; and by only half taxing speculative windfalls relative to earned incomes.

1 comment:

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