Canberra more affordable for renters but low-income residents priced out

The annually released National Shelter-SGS Economics and Planning Rental Affordability Index found median rents have dipped slightly in the ACT over the past year but it is largely the worsening rental market in other cities that has placed Canberra near top of the leaderboard.

The result is an improvement on last year, when rental affordability in the ACT fell to the lowest level since 2013 and the jurisdiction was rated among the worst for renters.

But while this year's report describes Canberra as being "on the border of acceptable affordability", it's only outer suburbs around Tuggeranong and Gungahlin that have "returned to acceptable levels of rent" and that's for renting households with a gross annual income of $126,248 - the highest average in the country.

Suburbs in central Canberra are "moderately unaffordable", even for the median income household.

The rental situation is much worse for low-income households - including students in share housing and pensioners - for whom every suburb in Canberra is unaffordable to extremely unaffordable.

A spend of 30 to 38 per cent of income on rent is considered unaffordable, while 38 to 60 per cent is classified as severely unaffordable. Anything above 60 per cent is extremely unaffordable.

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National Shelter chief executive Emma Greenhalgh said for low-income households this meant having to make difficult decisions around essential expenditure, which could include spending less on food or foregoing heating and cooling.

She said some households might also look to moving somewhere more affordable, which meant potentially moving away from family, friends and support networks.

"That has a really significant impact," she said.

The report found a single pensioner on $36,691 would spend 67 per cent of their total income to rent a one-bedroom dwelling in the ACT.

Meanwhile, a single person on a JobSeeker payment receiving just over $22,000, would have to spend more than their entire annual income to rent a one-bedroom in the ACT.

It comes amid a drop in social and affordable housing stock, compared to a decade ago.

Ms Greenhalgh said investment in social and affordable housing, including through the Housing Australia Future Fund, was a welcome move but "enhancements" to Commonwealth rental systems were also vital.

May's federal budget included a 15 per cent boost to maximum rates of Commonwealth rent assistance for more than 1 million Australians.

The increase was the largest in decades but Ms Greenhalgh said it was still not "keeping pace with the way that rents are increasing".

She also pointed to the ACT laws limiting rent rises to 10 per cent above the consumer price index as among models that needed to be replicated nationally.

"We would [also] particularly like to see some meaningful tax reform around capital gains, tax discounts and negative gearing," she said.

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