Demand is outpacing supply for public housing across Australia, new figures show, as soaring property prices and a tightening rental market across regional Australia has led to what some experts are calling a “crisis.”
Newly-released data from the Queensland government shows that thousands of the state’s residents are currently stuck in a public housing bottleneck.
It found that 2,000 households were added to the social housing register in Queensland last financial year, with 27,933 applications currently out for public housing.
“Given the impact of COVID-19 on the housing market right across the state, it is not unexpected to see an increase in people seeking support through the Housing Register,” Queensland’s Housing Minister Leeanne Enoch told the ABC.
The Queensland Council of Social Service said the social housing register figures list had increased by 78% over the past five years.
This follows data released in June that showed there were more than 50,000 households across NSW already on the waitlist for social housing.
Community Housing Industry Association (CHIA) NSW cited internal modelling that showed NSW has a shortage of at least 70,000 social housing dwellings.
“There is simply no strategy for addressing this critical shortfall,” the CHIA said in a media release.
“States around Australia have begun to respond to the housing crisis. NSW has the biggest waiting list of all.”
Similarly, figures from the NSW Department of Planning and Environment show an increasing squeeze on housing supply, which it said requires government action.
Data released in late September showed that 29,785 new homes were built in Sydney over the 2020-21 financial year, lower than the 30,190 homes completed over the 2015-16 financial year, and around 8% lower than the 32,464 homes completed over the 2019-20 financial year.
Luke Achterstraat, executive director of the NSW Property Council said the recent figures reflected the council’s concerns about housing affordability and supply.
“The NSW Intergenerational Report states that we need 42,000 homes built per year. With an existing undersupply of almost 50,000 homes across the state, to fall behind a further 12,000-plus homes this year puts us in dire straits and highlights the need for positive solutions,” Achterstraat said.
“Without immediate action, aspiring homeowners and renters will suffer ongoing and increasing housing affordability challenges.”
Rental stress is pushing demand for public housing
Leo Patterson Ross, chief executive of the Tenant’s Union of NSW told Business Insider Australia it had witnessed skyrocketing rental stress since the start of the pandemic.
The Tenant’s Union was increasingly hearing it was leading members to make difficult decisions in order to be able to stay in their property.
When you’re paying too much rent, that means “you’ve sacrificed somewhere else,” Ross said.
Migration away from cities in record numbers as a reaction to pandemic lockdowns had exacerbated existing trends, he said.
Capital cities lost 11,800 people to internal migration, the largest quarterly net loss on record, in the first three months of 2021, according to recently released ABS figures.
“We’ve really seen the most aggressive increases [in rent] up and down the coast,” Ross said, referring to NSW and Queensland.
Ross said these movers, who were still earning the same income they were when they were in capital cities, were inadvertently driving up rent because of the way Australia’s rental market operates.
“The way that we have structured our rental system is that it’s a competition,” Ross said. “It means that [landlords] will increase the price to match the demand and to match the people trying to find a home.”
He said as a result of movers encroaching on regional towns, people unable to meet increasing rents were “being evicted to make way for people who are coming in from out of town.”
Ross said one way to redress this imbalance was for the government to build a supply of affordable housing to create stable “availability and pricing” outside of the current market.
“Because there’s no genuine competition for landlords, particularly [on] the low end of the private market, there’s very little competition that would change their behaviour and make them work to keep their tenants,” Ross said.
“A big supply of genuinely affordable housing would provide that competition.”
In a statement, Assistant Treasurer and Minister for Housing, Homelessness and Social and Community Housing Michael Sukkar said the federal government’s National Housing Financing and Investment Corporation (NHFIC) was making significant inroads to support social and affordable housing.
He said it had supported more than 13,000 social and affordable properties in three years.
“The government is also delivering across the housing spectrum, with around $9 billion expected to be spent in the upcoming financial year on housing and homelessness,” Sukkar said.
However data from Homelessness Australia shows the federal government has cut investment in social housing and homelessness by $1 billion over the past decade.
During this period Australian rental prices jumped 30% and house prices rose by 50%.
Senator Mehreen Faruqi, Greens spokesperson for Housing, told Business Insider Australia that there was “enormous urgency” to invest in public and community housing.
“We are in a housing crisis, plain and simple. Our society is growing more inequitable as access to permanent housing and home ownership has become completely out of reach for so many.”
“One million new homes will be needed – right across the country – to clear public housing waiting lists and ensure universal housing.”
Wealth inequality rising due to Australian market
Brendan Coates, economic policy program director at Grattan Institute, told Business Insider Australia the overarching story over the past two years has been a growing divide between haves and have-nots driven by the Australian property and rental markets.
“Wealth inequality is widening, basically because wealth is rapidly accelerating,” Coates said, driven by investment in property.
He said he expects the effects to continue emerging out of the pandemic, and agreed that government intervention was necessary to walk back some of the impacts.
“If housing is unaffordable for low income earners, in particular, that would mean putting more money in their pockets, so they can afford to compete in the housing market, or so they can afford to secure a stable rental,” he said, along with policies that raise the rate of rental assistance.
Coates said one of the more impactful ways to counter this, along with more effective taxation of savings and accumulated wealth, was through the housing market.
“A big part of the solution is fixing housing – that would do a lot to reduce the effects of slowly increasing inequality.”