Perth residents spending 30 per cent of income on housing, as city named least affordable for renters

On a weekday midday, 30 people gathered on the footpath of a Perth apartment building, vying to become tenants. They slowly moved through the one-bedroom apartment in Rivervale, each hoping the others would be deterred by the price.

However, most were likely willing to pay the $550 per week rent, almost $200 more than it would have been four years ago. This is the reality for countless residents in Perth, which has been ranked as the least affordable capital city in Australia for renters, overtaking the notoriously expensive Sydney.

Michelle stood among the crowd, with four open houses to attend that day. "It's terrible. Every rental has 30, 40, 50 people," she said. Sebastian, 19, stated that the prices were exorbitant compared to the housing conditions offered. "Like here, it's nice, but it's not big, and it's quite expensive for what you're getting," he said.

The SGS Economics and Planning's Rental Affordability Index report compared median rent prices with the incomes of 10 different low to moderate-income household types. The report found that Perth residents are spending over 30% of their income on rent, on average. This is the first time on record that two capital cities (the second being Sydney) have such high rent-to-income ratios. Before the pandemic, Perth had been the most affordable capital city for renters by a significant margin.

However, the city's rents have surged by 43% in the past decade, from an average of $440 per week to $630, while rents in regional WA have increased by 13%. Shelter WA chair Kieran Wong said the decline in rental affordability in Perth would not be easily resolved. "This is a trend that shows no signs of abating... it's the biggest challenge," he said. "It's not caused by a single policy lever, but by a number of competing and complex factors."

Shelter WA has been calling for tenancy reform for years, and Mr. Wong said the government has a responsibility to support affordability initiatives while also encouraging landlords to improve housing conditions. "The legal environment in which tenants live and operate is really not fit for purpose," he said. "People are having to spend more than they currently earn to stay in the rental market."

Another report by the Circle Green Community Legal, which surveyed hundreds of tenants over two years, found that many West Australian renters were enduring poor living conditions out of fear of homelessness. The "Making Rent Fair" report found that nearly two in five tenants lived in homes infested with pests, and nearly three in five lived in homes with leaks, dampness, or mold. The survey also showed that more than half of respondents reported electrical issues or doors and windows that would not lock.

"We're not just talking about inconvenience or discomfort, this is actually dangerous," said principal lawyer Alice Pennycott. She said the power imbalance between tenants and landlords exacerbated these issues. "We know that tenants are desperate to hold onto their homes and so they have to endure these conditions because for a growing number of people the alternative is homelessness," Ms. Pennycott said. "The law has always been quite unclear and difficult to enforce for tenants. When we're in a market where tenants are so disadvantaged... it makes taking any action even more difficult and more unbalanced for them."