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Why do we need to be concerned about housing affordability?

People in NSW earning very low to moderate incomes are increasingly unable to access housing that is affordable. During 2009/10, almost half (45.7%) of low to moderate income private renters in NSW were in housing stress, up from 39.9% during 2007/08 [1]. This was even more accentuated in the Sydney region, where over 50% of low to moderate income private renters were in rental stress, up from 41.4% in 2007/08 [2].

Demand for affordable housing far exceeds supply. This continues the upwards pressure on rents and house prices and leads to a decline in the number of available affordable properties, even in suburbs which are experiencing an overall increase in supply of rental properties. A comparison between the twenty most affordable suburbs for low to moderate income earners in 2006 with affordability in the same suburbs in 2010 found dramatic reductions in the number of properties that were affordable – for example, the suburb of Westmead recorded an 89% reduction in available affordable properties over the period [3]. In most instances, the properties were the same in 2010 as they were in 2006, but the rents for these properties had increased so they were no longer affordable for low to moderate income households.

People on low incomes living in rental housing are some of the most vulnerable people in the community and at highest risk if there is any tightening of supply or price increases in the private rental market. Households which are struggling to pay housing costs are faced with a range of issues that further erode their ability to meet costs. These include:

  • living with unmanageable levels of debt, further exacerbating housing vulnerability
  • working long hours to pay for housing
  • travelling long distances to work or services
  • living in overcrowded or substandard housing
  • going without essentials such as adequate food, heating, medication or education
  • missing out on other opportunities because housing costs are too high relative to income.

[1] Where housing stress is defined as spending more than 30% of their gross household income on rent

[2] A 2011 ABS Survey of Income and Housing

[3] Housing NSW analysis, using Rental Bond Board data

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Last updated: 24 Sep 2019