Low wage growth, a point seized on by the opposition Labor Party, which has said in the run-up to this year’s federal election that it could legislate to raise wages, is part of the reason rental stress – typically seen when households spend more than 30 per cent of their income on rent – is so high.
“This is playing into the housing story at the moment,” Dr Troy said.
“The low rate of wage inflation is impacting on people’s ability to pay more rent and afford houses. If their wages aren’t growing but rents and house prices are, then you inevitably see more people enter into rental stress.”
Separate figures collated by UNSW show that eight of the top-10 federal electorates in the country ranked by rental stress are in NSW, with two in Queensland.
Fowler, held by Labor’s Chris Hayes, tops the list, followed by shadow treasurer Chris Bowen’s electorate of McMahon, then Richmond (Labor, Justine Elliot), Blaxland (Labor, Jason Clare) and Watson (Labor, Tony Burke). In sixth place is Lyne, held by the Nationals’ David Gillespie, then Hinkler in Queensland (Nationals, Keith Pitt), Page in NSW (Nationals, Keith Hogan), Moncrieff in Queensland (Liberal, Steve Ciobo) and Cowper in NSW (Nationals, Luke Hartsuyker).
The report follows a separate report last year by housing research group AHURI that the country had a shortfall of 727,300 social homes and estimates that funding the construction by direct grant and low-interest government-supported loans would cost $8.6 billion a year, in contrast to the annual $11.8 billion the country spends each year on negative gearing and capital gains tax subsidies.
More than 1.3 million households cannot afford the private rental market or need assistance to rent without putting themselves in financial stress, AHURI said in a 2017 report.
While NSW had the most acute shortage of dwellings for people in the two bottom quintiles by income, Tasmania and South Australia had the highest rate of growth needed in social housing for households in the most chronic rental stress, the UNSW/CHIA report said.
Rental affordability isn’t just an Australian problem. Between 2004 and 2014 London lost 8000 social homes as public housing sites that were privately redeveloped, including the Heygate estate that became Lendlease’s Elephant Park, a London Assembly report showed.
Over the same period, homelessness in London has doubled, said Oliver Wainwright, architecture writer for The Guardian, who will next week give the keynote address on housing titled Form Follows Finance, at Melbourne Design Week.
“There’s not a real housing crisis, it’s a crisis of affordability of housing, of distribution of resources,” Mr Wainwright said.