A new report has found renters need to be earning $130,000 a year to be able to afford to rent a three-bedroom house in inner-city Melbourne stress-free.
Compass Housing’s Affordable Housing Income Gap Report revealed that the figure is $50,000 more than what a typical renting household makes in a year.
Renters that are happy to take a two-bedroom unit would need an income of around $90,000 and the only type of home that’s affordable for the typical inner-city renter is a one-bedroom unit.
In order to be renting without being considered in renting stress, households need to be paying less than 30 per cent of their income on housing costs.
Martin Kennedy from Compass Housing says renters are facing a tough choice.
“To avoid housing stress in Melbourne, a typical renting household generally has to choose between living a considerable distance from the city or living in a one-bedroom apartment,” he told ABC.
“Neither of those things are practical for lots of families so they’re effectively forced to accept living in housing stress.”
“People in housing stress are less able to pay for other essential things, food and utilities, insurance, health care, child care.”
According to the report Melbourne’s least affordable rental suburbs are Brighton, Brighton East, Port Melbourne, Mount Eliza and Carlton North. The city’s most affordable rental suburbs are Melton, Dandenong, St Albans, Sunshine and Noble Park.
To ease rental affordability the report recommends more security for renters, tax reform and the construction of 500,000 social and affordable homes over the next ten years.