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Apr 27, 2017

Despite the downturn in Western Australian property over the last year, affordability in the rental market remains out of reach for many people on low and fixed incomes.

The 2017 Rental Affordability Snapshot (RAS) by Anglicare found that of 12,437 rental properties on the market during April, only a handful were accessible to people on pensions, allowances or minimum wage.

Anglicare chief executive Ian Carter said that with the median rent being around $375 per week across the north of the state through the Pilbara and Kimberley, the cost pressure on job seekers, single parents, people living on Newstart, Aged Pension or Disability Support was overwhelming.

“It’s generally accepted that spending more than thirty percent of your disposal income on rent means you then struggle with the other costs of living. Using this benchmark we can measure the financial stress of the most disadvantage people in the community,” Mr Carter said.

The Anglicare RAS is conducted annually so trends can be monitored. National data is provided by realestate.com.au.        

“It’s clear that the rental situation in WA is different to the east coast where undersupply is more of an issue, however, the greater availability of stock in WA’s private rental market  doesn’t mean it’s suitable or affordable to just anyone and the demand on social housing is as strong as ever,” Mr Carter said.    

Mr Carter said that the soft housing market in WA had made renting easier for couples on minimum wage with young children, but for people on government support it was still very tough or impossible.       

“Even though the median rent for the Northwest fell 7 percent since the previous Snapshot in 2016, people on low incomes continue to struggle to find affordable accommodation.

“In the entire Pilbara and Kimberley areas, there were only seven properties that were found to be affordable for a single parent with one child on Parenting Payment, who could afford rent of $188 per week without experiencing housing stress.

“And a single person on Disability Support Pension would have found just eight affordable and appropriate properties through the top of the State during April,” Mr Carter said.      

“It’s slightly better news for working couples on minimum wage with two young kids, there were 234 suitable and affordable properties, but this was down from 289 on the same time last year.    

“Similarly, the number of affordable rentals for couples with young children where one partner is working and the family is in receipt of parenting payments and Family Tax Benefits has also fallen, down by 8 homes to 103.   

“Even so, in most other income brackets the availability of appropriate, affordable rental accommodation is negligible to non-existent,” Mr Carter said

The 2017 Anglicare RAS found the following: 

Household type

Income type

Number of affordable and appropriate homes in Northwest April 2017

Number of affordable and appropriate homes in Northwest April 2016

Couple with two young children

Newstart Allowance

18

18

Single with two young children

Single Parenting Payment

11

13

Couple, no children

Age Pension

37

56

Single, one child under five

Single Parenting Payment

7

11

Single, one child over eight

Newstart Allowance

0

2

Single

Age Pension

10

2

Single over 21

Disability Support Pension

8

2

Single

Newstart Allowance

0

0

Single over 18

Youth Allowance

0

0

Single in share house

Youth Allowance

0

0

Couple, two young children

Both earing minimum wage plus Family Tax Benefit A

234

289

Single, two young children

Minimum wage plus Family Tax Benefit A&B

55

41

Single

Minimum wage

13

18

Couple, two young children

Minimum wage plus parenting payment (partnered) and Family Tax Benefit A&B

103

111

 

Mr Carter said the issue for many tenants in WA is not so much in finding a rental but leaving one.

“Anglicare WA’s financial counsellors report a significant increase in tenants struggling to cope with the costs of breaking an existing lease.

“Our housing system is now flooded with properties and landlords are dropping prices to attract tenants, but this is often bad news for those tenants who have to break an existing lease and move out,” Mr Carter said.

Under WA’s break-lease laws, if a tenant does not complete the term of their contract they are compelled to pay rent for the period the property remains vacant under that lease, as well as covering any shortfall in rent if the landlord has to adjust rent downwards to meet current market conditions.

“Tenants who have lost jobs, experienced a relationship breakup or need to move interstate to find work, are finding the cost of a break-lease a significant burden.

“For example, someone with a one-year lease may have to move out after six months. It might then take two months to find another tenant and the rent might have to drop by $50 to secure a new lease.

“In this example, the person breaking–lease will have to pay the rent on an empty property for two months, plus the re-advertising costs, and payout the rental shortfall of $800. 

“It can quickly add up to thousands of dollars and become extremely stressful to people in very difficult situations,” Mr Carter said.      

Mr Carter said it was incumbent on Federal and State Governments to provide adequate and appropriate social housing for those people who cannot enter or afford the private rental market.   

“Everyone deserves a home; this is a human right not a privilege. For the State’s poorest people the private rental market rarely meets their needs. The percentage of income required to rent a property leaves very little for food and other expenses.

“The pressure in WA’s rental market is not a lack of availability but affordability. Many individuals and families have to make tough decisions around the essentials they cannot buy and the bills they cannot pay in order to avoid eviction.

“Tenants in WA on low and fixed incomes are not suffering from housing stress, but from the financial stress that comes from spending most of their insufficient income on rent. Over time this entrenches poverty and people are unable to move,” Mr Carter said.

Mr Carter renewed his call for more investment in community and state housing.

“The private rental market cannot meet the needs of all those on pensions, benefits and minimum wages.

“All levels of government – Federal, State and Local have a moral obligation to ensure universal care for the most vulnerable in our community.

“They need to work together on a comprehensive package which provides affordable and appropriate housing for all people.

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