TWEED SHIRE renters are experiencing severe housing stress, according to a report released this week by Compass Housing, which lists the region as one of the most unaffordable in NSW.
The report rated Tweed rental stress as severe for the typical household and comes as the vacancy rate for the parts of the shire including Murwillumbah, Tweed Heads and Banora Point remains below one per cent.
The Affordable Housing Income Gap (AHIG) Report by Compass Housing, a NSW-based not-for-profit community housing provider, found that a typical Tweed Shire household is currently spending 36 per cent of their income on rent, based on a median rent of $430 per week.
The report also calculated the percentage of additional income required to avoid housing stress, named the Affordable Housing Income Gap (AHIG).
The Tweed scored an AHIG Index of 21, meaning a typical household needs to earn an additional 21 per cent, or $251 per week, to avoid housing stress.
A score of 21 is rated as severely unaffordable, a score of greater than 35 is extremely unaffordable, while below zero is affordable.
The AHIG report also investigated housing affordability for different housing types, which included three-bedroom homes and two-bedroom units in the Tweed.
Two-bedroom units were found to be affordable, with households required to pay 30 per cent of their income on rent.
Three-bedroom homes in contrast were severely unaffordable with the typical household needing to earn an additional $218 per week, before the median rent of $420 was considered affordable, and scored an AHIG Index of 18.
The Tweed rates amongst the least affordable areas in the state with only Byron Bay (AHIG Index 61), Ballina (AHIG Index 47), Sydney suburbs Woolahra and Waverley (AHIG Index 47 and 41) and the Clarence Valley (AHIG Index 29) being less affordable.
This echoes results from the 13th Annual Demographia International Housing Affordability Survey (2017), that listed Tweed Heads as the eighth least affordable housing market in the world, where the median house price was 9.7 times annual income.
Tweed Heads dropped off the list in the 2018 survey, which found there were no affordable or moderately affordable markets anywhere Australia.
Compass Housing spokesperson Martin Kennedy said the findings proved housing stress is now a problem for middle income earners.
“Even working people are struggling to afford suitable rental properties,” Mr Kennedy said.
“This can have a real impact on living standards because people in housing stress are less able to pay for other essentials like food, utilities, insurance, healthcare, childcare and debt repayments.”
Mr Kennedy said the steady decline of housing affordability for renters is part of a broader housing crisis driven by a combination of low interest rates, preferential tax treatment for investors, rapid population growth, artificial rationing of land supply, high transfer duties and a prolonged failure to invest in social and affordable housing.
The report recommended several measures to improve rental affordability including the construction of 500,000 social and affordable homes in the next decade throughout the eastern states.
It also recommended reviewing the tax and transfer system to strike a balance between the level of support provided to investors, first home buyers and renters, and reforming state tenancy laws to provide greater security of tenure for renters and decrease demand for social housing.
Rental market tight
The latest vacancy rates for the Tweed Shire published by property analyst SQM Research found rental markets around Tweed Heads and Murwillumbah remain tight with less than one per cent of all rentals vacant.
The vacancy rate for the Tweed Valley postcode of 2484, which includes Murwillumbah, Tyalgum and Condong, has hovered below one per cent for the past five years and the latest figures show the rate has dipped to only 0.6 per cent.
The rental market remains tight around Tweed Heads, with a 0.9 per cent vacancy rate posted in July, and the 2486 postcode that includes Tweed Heads South and Banora Point posted only 0.5 per cent with vacancy rates this low in both areas for the past four years.
In contrast the vacancy rate for the southern Tweed Coast was the highest in the shire, with the 2489 postcode that comprises Pottsville and Hastings Point, spiking in the past year from a vacancy rate of around two per cent to almost five per cent.
The Kingscliff postcode of 2487 increased from around one per cent at the beginning of the year to 1.9 per cent, while the Bogangar postcode has remained stable around three per cent for the past 18 months.
Vacancy rate figures published by the Real Estate Institute of NSW for the Northern Rivers reveal a trend towards more vacant properties with the overall rate for the region increasing from 0.7 per cent in July 2017 to 1.3 per cent in July 2018.
Despite the rise, the region has the second tightest rental market in the state with only Murrumbidgee scoring lower at 0.7 per cent.
Rents on the rise
The latest figures for the Tweed Shire show rents have increased by seven per cent in 12 months while the number of new tenancies decreased by more than 13 per cent.
The tenancy figures come from NSW Family and Community Services (FACS), which show the Tweed Shire’s median rent increased to $440 per week in the March 2018 quarter, representing more than double since the 2006 Census.
Back in 2006 the Tweed’s median rent was $210 per week and increased by 62 per cent to $340 per week by 2016, whilst the median household income increased by 56 per cent from $683 per week to $1,064 per week.
The data from FACS lists the median rent for Tweed houses at $550 per week, whilst units were $370 per week and townhouses $440 per week.
The cost of renting increased by 2.3 per cent in the March quarter and 7.3 per cent over the year, while the number of new rentals decreased by 6.3 per cent in the quarter and by 13.4 per cent over the year.
When facing a crisis such as this, residents can benefit from effective and comprehensive financial planning, which helps them make the proper use of their hard-earned money. Regardless of whether they are buying a car, renting a property, growing their business, or selling assets, such a plan could be beneficial.
According to the AHIG report, between the 2006 and 2016 Census the number of renters nationwide increased from 27 per cent to 31 per cent, but figures for the Tweed Shire show the number of renters only marginally increased from 26 per cent to 26.8 per cent.
Council seeks to address affordable housing crisis Councillors voted at last week’s meeting (Thursday, August 16) to place an Affordable, Attainable and Appropriate Housing Policy Statement on public exhibition.
The statement comes after Tweed Shire Mayor Katie Milne tabled a motion in May 2017 to bring forward a report on options to address a lack of social and affordable housing.
The statement commits Tweed Shire Council to work in partnership to address “affordable, attainable and appropriate housing particularly for those most in need, providing current and future residents with choice, opportunity and the ability to participate meaningfully in community life”.
“This is a basic human right regardless of their age, culture, gender, race, religion, physical ability or sexual preference,” the Affordable, Attainable and Appropriate Housing Policy Statement read.
Council will also write to the Minister for Families and Community Services and the local State Members Geoff Provest MP and Thomas George MP to highlight Council’s concerns with a lack of social housing across the shire.
A report compiled for Council by Urbanista titled Tweed Shire Responding to Housing Needs: Context and Options Paper, states that the Tweed has a social housing rate of only 2.8 per cent, compared to the state average of four per cent.
The report said housing market trends in Tweed include a “decline in the number of renter households, a higher proportion of unoccupied dwellings, significant mismatch between the type and size of housing and households, high rents and high housing prices”.
The rate of unoccupied dwellings was also highlighted as a concern by Mayor Milne, with 10.7 per cent of all homes empty, compared to the greater Sydney region of 7.7 per cent and 9.9 per cent state-wide.
The report also stated that Tweed private market rents are high relative to regional NSW and were more on par with rents in outer metropolitan Sydney.
The number of Commonwealth Rent Assistance (CRA) recipients in the Tweed Shire is also growing and the proportion of these in housing stress has ranged from 35 per cent to more than 40 per cent between 2001 and 2015.
Results from the 2016 Census show the majority of housing in the Tweed was separate houses and that the Tweed has a lower proportion of flats and apartments relative to NSW.
“Housing affordability pressures in the Tweed Shire are particularly acute as a result of a unique combination of factors,” the Urbanista report states.
“The shire has lower household incomes and higher unemployment typical of many regional areas, while the attractiveness of its coastal environment to both tourists and those relocating from metropolitan centres, combined with its proximity to the Brisbane/Gold Coast region, have resulted in cost pressures more typical of major metropolitan areas.”
YOUR THOUGHTS: Are rising rents affecting your household budget? Or are you having difficulty securing a rental property? We’d love to hear from you. Email editor@theweekly.net.au