Affordable rentals disappearing from Melbourne suburbs

Affordable rental properties have all but disappeared from Melbourne’s suburbs, including the outer fringe which has long been thought of as offering low-cost housing. CHP has analysed affordable rental lettings by property type since 2000 to identify where the greatest declines in affordability have occurred. For one, two and three bedroom properties, both the proportion and absolute number of affordable rental lettings has declined, leaving low income households stranded.  CHP’s full analysis can be downloaded here. Our data has been taken from the Department of Human Services’ rental report

A recent article in The Age examined the issue of housing affordability, highlighting the growing number of residents in traditionally affordable areas like St Albans who are now living in ‘housing stress,’ where more than 30 percent of income is spent on rent.

Over the last 10 years, the proportion of affordable rentals in traditionally affordable areas has dropped by at least 75 percent, according to CHP’s analysis. These areas include Frankston, Dandenong, Kingston, Knox, Maribrynong, Casey, Whittelsea, Manningham, Maroondah, Monash, Yarra Ranges, Moonee Valley and Whitehorse. For example in December 2003, 80 percent of rental properties in Dandenong were affordable to someone on a Centrelink income. Today, that figure is just 10 percent. The situation is even more difficult for single people on Newstart Allowance  – of the 31 local council areas in Melbourne, 13  did not have any one bedroom properties that were let at an affordable rate.  

Rental affordability is not just a problem for people relying on income support. Low income wage earners who take home just over $600 per week would be spending nearly half their income on rent, living in Dandenong. Previously people moved further out from the city to find cheap rent, but that’s clearly no longer the answer, which begs the question – what is? Moving to regional Victoria is no longer a realistic option either, as the proportion of affordable rentals in those areas also continues to drop.

These figures show just how stark our housing affordabiltiy crisis is, and that it is hitting low income renters the hardest. The shortage of affordable one and two bedroom rentals shows up on the public housing waiting list, where the majority of people waiting for homes are single people and single parents.  In April, CHP along with six other peak bodies released the ‘Making Social Housing Work’ report which called on the Victorian Government to develop an affordable housing strategy, which includes changes to taxation, planning and  investment, new models for private investment in housing and funding of $200 million per year for the creation of 800 new affordable homes each year. Without urgent and coordinated action, these trends in the rental market will push low income households out of our city and sometimes out of their homes altogether.


Affordable rent graph


Afordable private rentals