Brisbane, Hobart and Sydney become least affordable cities for renters as regional centres also suffer

The latest annual Rental Affordability Index, released on Tuesday, shows more than 40% of low-income households are now in rental stress and struggling to find money to pay for food, heating and healthcare.

The RAI is a key annual indicator of rental affordability relative to household income. If a tenant spends more than 30% of their income on rent, they are considered to be in housing stress.

Regional areas have been the hardest hit by decreasing rental affordability, the report found, with Hobart continuing to be the least affordable city due to inadequate supply pushing prices above wages.

But each capital city has taken a blow.

The least affordable suburbs were Bondi, Darling Point and Vaucluse.

Melbourne, while experiencing a decline to pre-pandemic levels of affordability, was the most affordable capital city in Australia with average rental households having a gross income of $101,300.

The chief executive of National Shelter, Emma Greenhalgh, said those bearing the brunt of the rental crisis were people on low incomes and income support payments.

Rental affordability remained poor for single people on jobseeker even during the Covid-19 supplement, the report found, with rising rents in capital cities continually outpacing the allowance and pushing recipients to the outer fringes of cities.

Data shows 42% of low-income households are now in rental stress, compared with 35% in 2008. It comes as the jobseeker payment has fallen from $32,638 in 2020 to $21,320.

For single pensioners, living in metropolitan areas would require 50% or more of income to be spent on rent in the majority of capital cities.

Greenhalgh said low vacancy rates, interstate migration and global supply chain issues were contributing to escalating rental prices, however the pressure could be alleviated with further government support.

Witte said floods in the New South Wales northern rivers region this year had a devastating impact on the housing sector, with low vacancy rates placing pressure on existing rental stock and new development.

Lismore was one of the worst affected, where affordability plunged by 10% between 2021 and 2022. The town of Bellingen dropped by 14%. In Queensland, Gympie and Maryborough fell by 17% and 16% respectively.

Net internal migration to the regions in March 2021 was about 50% higher than the historical peak.