Social and affordable housing in Australia
Excerpts from The State of the Nation’s Housing 2021–22 states:
The National Housing Finance and Investment Corporation (NHFIC) was established in June 2018 under the National Housing Finance and Investment Corporation Act 2018.
NHFIC calculates housing need as those in significant rental stress (defined as those in the lowest household income
quintile paying more than 30% of their income in rent), as well as those without a home.
An increasing proportion of those renting in the private rental market are in the 2 lowest income quintiles (the poorest), growing from 43.0% of those renting privately in 2001 to 46.9% in 2021 (or an additional 1.45 million people.)20 When rents rise, those on the lowest incomes have the least capacity to move to cheaper accommodation.
As such, many low-income renters are paying a significant proportion of their income in rent. Between 2001 and 2021, the proportion of lowest–income quintile individuals renting in the private sector paying more than 50% of their household income in rent doubled from 10% to 20% . The persistence of rental stress has also increased, with nearly half (47 per cent) of those who were in rental stress in 2013 also in rental stress in 2017, compared to 31% between 2001 to 2005. 21 As recently noted by the
Productivity Commission, ‘private rental unaffordability and low vacancy rates are fuelling demand for NHHA-funded
homelessness services and social housing’.
To address these issues, governments can intervene to improve the function of the existing housing market. When housing supply is responsive to changes in price, new supply improves affordability in all parts of the market, including for low-income renters. The Productivity Commission has recommended reforms around removing barriers to new supply and for governments to ‘level the playing field’ and review barriers around institutional investment.
The Australian Government’s recently announced National Housing Accord is also looking to increase housing supply. However, the extent to which the increase in new supply will allow older dwellings stock to ‘filter down’ to low-income renters or homeowners is in question
Between 2006 and 2021, the number of social housing dwellings in Australia increased in net terms by about 2,000 each year (from 409,000 to 440,000). This accounts for all provider types, including public and community housing.
Social housing dwellings as a proportion of all occupied private dwellings declined over this time, failing to keep pace
with demand and population growth.
Returns from the proposed Housing Australia Future Fund are expected to deliver 20,000 new social dwellings and
10,000 new affordable dwellings over 5 years.26 This will, on average, increase the number of social housing dwellings
twofold each year for at least 5 years, from Commonwealth contributions alone. As part of the National Housing Accord,
the 2022–23 Budget also included funding to support a further 10,000 affordable homes from 2024–25 onwards.
Everybody’s Home is calling on the Government to build at least 25,000 social and affordable homes each year.
State of the Nation’s Housing Report 2022–23: https://www.housingaustralia.gov.au/research-data-analytics/state-nations-housing-report-2022-23