Sydney, being Australia’s largest city, is generally more expensive to live in than the rest of the country.
And the biggest part of those costs — the amount spent on rent or in mortgage payments — depends on where you live.
Some families in Sydney need to pay as much as 65% of their income to rent, according to a new measure of rent affordability released today. It is generally accepted that a household is in housing stress if it pays more than 30% of income on housing.
The new measure, the Rental Affordability Index, was created by National Shelter, Community Sector Banking and SGS Economics & Planning.
Here are the most affordable, and least affordable, suburbs in Sydney, according to the index which is based on the proportion of average household income needed to pay the rent. In Sydney, average household income is about $1,474 a week:
Affordability in Sydney has been relatively stable recently. The index in the second quarter of 2015 was 108, improving slightly from 107 in the third quarter of 2012.
This means that the average income household would need to spend 28% of income on rent, very close to 30%, the rental affordability threshold level.
Rents are highly unaffordable close to the inner city and improve the further away you live from central Sydney.
Here are a few more takeouts from the report:
- The least affordable postcodes are in Sydney’s inner area: Darling Point, Kirribilli, Woollahra, The Rocks and Paddington.
- Rental affordability in these suburbs is below 50 which means that the would need to pay 60% of their income or more on rent.
- Sydney’s five most affordable postcodes are in the outer areas of the metropolitan area, to the west of the central city and to the far north towards Newcastle.
- Australia’s rental market is growing with the owner-occupation rate dropping to 65% from 70% and declining.
“This report shows housing affordability is a much bigger problem for renters than owner occupiers,” says National Shelter’s Adrian Pisarski.
“The report is designed to fill a gap in available data on rental affordability and focus attention on the need to reform our rental system. Rental stress is a drag on productivity, is increasing poverty and breaking down social cohesion.”
Low income families on $500 a week would have to spend 65% of their income to rent a property in New South Wales, 54% in Queensland, 59% in South Australia, 57% in Western Australia and 54% in Tasmania.
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