Surging rents and lack of social and affordable housing, especially in regional Australia, are causing housing stress amongst renters with low or modest incomes, a new study has revealed.

The report released by UNSW Sydney and ACOSS Poverty and Inequality Partnership titled COVID-19: rental housing and homelessness impacts in Australia states that the price boom in late 2020 stimulated by government measures to boost private market demand was the most significant housing impact of the pandemic in Australia. However, it also compounded the longstanding issues of unaffordability, inequality and indebtedness.

“A crucial part of any crisis is what lessons can be learnt that could and should lead to policy reform,” lead author Professor Hal Pawson, associate director of the City Futures Research Centre said.

“State governments generally responded well in their emergency actions to help homeless people and protect vulnerable renters during the worst of COVID. To their credit, some have gone much further by pledging billions for short-term social housing investment. But there is little sign of any positive legacy on the systemic reforms and Commonwealth government re-engagement is fundamentally needed to fix our housing system.”

Feedback from community organisations across the country reveals the growing levels of despair experienced by people trying to find affordable accommodation in both metropolitan and regional areas.

ACOSS CEO Dr Cassandra Goldie said, “The situation for those on the waiting list for social housing feels increasingly hopeless. Individuals and families struggle to keep a roof over their heads in the face of rising private market rents or are forced to stay in unhealthy or unsafe circumstances.

“The COVID crisis tested governments. Most state governments did a remarkably good job in protecting people who were homeless during COVID. But with such a chronic shortage of affordable homes, the resources they are putting towards social and affordable housing are just not enough to meet existing demand, let alone future need,” Dr Goldie said.

“We need the federal government to step up and step back into this space and do some heavy lifting to both address the massive social housing shortfall and meet the future needs of a growing and ageing population.”

Key findings from the report:

Post-pandemic social housing construction

Four state governments – Victoria, Queensland, Tasmania and Western Australia – have announced significant social housing construction as a component of post-pandemic stimulus investment, providing nearly $10 billion. Though more than 23,000 new homes will be added to the stock of public and community housing over the next four years, there are 155,000 households registered on social housing waiting lists across the country. More than 400,000 households also need affordable housing.

Rising housing stress from lack of affordability

While rents declined sharply in some inner-city suburbs at the beginning of the pandemic, they increased from mid-2020. By August 2021, they were accelerating at more than 8 per cent – far ahead of wage growth at less than 2 per cent.

Decline in affordable tenancies

In regional Australia, the proportion of tenancies low-income tenants can afford has declined from 41 per cent to 33 per cent throughout 2021. This percentage could decrease further with the end of affordable rents for homes developed under the National Rental Affordability Scheme (NRAS).

The report was researched and written for the Partnership by UNSW’s City Futures Research Centre’s Professor Hal Pawson, Dr Chris Martin, Dr Sian Thompson and Dr Fatemeh Aminpour.

Photo: Shutterstock

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