Surging population numbers continue to drive the rental crisis and politicians need to answer for policies that continue to drive up house prices, according to a new report.
Suburbtrends ‘Rental Pain Index, for August 2024, found widespread rental stress across the country is getting worse in many states.
Western Australia and Queensland are experiencing particularly severe conditions, with rental pain indices of 82 and 83 respectively.
Founder of Suburbtrends, Kent Lardner, said the situation is reaching a critical point.
“The massive growth in house prices in recent years has created a significant gap for most first home buyers, making homeownership increasingly unattainable without familial financial support,” Mr Lardner said.
“Those stuck without such support are likely to remain trapped in the private rental market.”
The percentage of areas experiencing extreme rental pain (defined as an RPI of 75 or higher) increased from 63 per cent in July to 68 per cent in August nationally.
NSW saw a significant jump from 61 per cent to 67 per cent of areas in extreme rental pain, with average rents increasing by 10 per cent and tenants spending 33 per cent of their income on rent.
Queensland’s situation worsened slightly, with 78 per cent of areas now in extreme pain, up from 76 per cent.
Rents in the state have risen by 10 per cent, with tenants spending 32 per cent of their income on housing.
South Australia remained relatively stable but still deeply affected, with 80 per cent of areas in extreme pain.
Rents increased by 10 per cent, consuming 31 per cent of tenant incomes.
Victoria experienced a sharp increase in rental stress, with areas in extreme pain rising from 64 per cent to 71 per cent.
Rents in the state jumped by 12 per cent, although they remain slightly more affordable at 28 per cent of tenant incomes.
Western Australia saw a significant deterioration, with areas in extreme pain increasing from 72 per cent to 77 per cent.
The state experienced the highest rent increases at 17 per cent, with tenants now spending 32 per cent of their income on housing.
Mr Lardner said the root cause of the problem lies in the disconnect between population growth and housing supply.
“Population growth and housing supply cannot be left as independent policies; they must be closely linked to ensure sustainable development,” he said.
“Without aligning these policies, the rental crisis will only worsen.”
He said the situation is leading to increased risks of displacement and homelessness, as evidenced by rising demand for specialist homelessness services.
Mr Lardner said there is an immediate need for action from policymakers to address the crisis.
“Immediate measures are needed to provide emergency accommodations and support for those at the brink of losing their homes or already homeless,” he said.
“This month’s data signals a looming reckoning for the political class, who continue to adopt policies that continually drive up house prices.”
