AUSTRALIA's first Rental Affordability Index released this week proved what many Highland renters already knew: rents around Bowral, especially, are out of reach for the average wage earner.
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The Rental Affordability Index (RAI) was created by National Shelter, Community Sector Banking and SGS Economics and Planning.
The index is based on the assumption that when housing costs exceed 30 per cent of a low income household's gross income, the household is experiencing housing stress. The index is broken into six categories ranging from extremely unaffordable to affordable.
Bowral 's RAI for the second quarter of 2015 was placed in the second worst category - severely unaffordable - where at least 38 per cent of income is spent on rent.
The RAI for postcode 2577 and 2575 are classified as unaffordable which is the third worst category (about 30 per cent of income spent on rent), while postcode 2578's classification is moderately unaffordable where 25 per cent of income is absorbed by rent.
This week the cheapest rental for a three-bedroom house in Bowral was $450 per week, with most properties around $540 per week, according to domain.com.au. Around Mittagong prices started at $360 and in Bundanoon the cheapest was $300 per week.
Low income households fall into the lowest 40 per cent of households, where average incomes range from $497 for welfare-dependent families to $1019 per week for working families (based on ABS Average Weekly Earnings for Greater Sydney).
National Shelter's Adrian Pisarski said that rental unaffordability is dividing Australia in a big way.
"Working families according to this report are experiencing severe housing stress. Australia's rental market is growing and where once Australia had an owner-occupation rate of 70 per cent, it is now closer to 65 per cent and declining," he said.
The report reveals for low income families on $500 a week, in NSW they would have to spend 65 per cent of their income to rent a property under current market conditions," Mr Pisarski said.
The next closest state to NSW was South Australia at 59 per cent.
"It shows what we have known anecdotally for far too long. Low income households are being hammered beyond belief. Moderate income working households are very hard up and have little disposable income," Mr Pisarski said.
"Many middle income households are finding it hard to make ends meet. These households then ultimately don't have disposable income to spend on key life items like health, transport, education and food."
Bowral's RAI was equivalent to Sydney suburbs such as Marrickville and Artarmon. Suburbs close to the Wollongong CBD and the northern Wollongong suburbs such as Bulli also had a similar index rating.
The top five most affordable localities in metropolitan Sydney were Back Springs, Mount Druitt, Bluehaven, Lake Haven and Silverdale where less than 20 per cent of income is spent on rent.
The five least affordable localities were Darling Point, Kirribilli, Woollahra, The Rocks and Paddington where more than 60 per cent of income goes towards rent.
The full report can be downloaded from www.shelter.org.au
