Rental affordability is at its worst in almost a decade with new leases costing more than half of the household budget for those on low incomes.
As the federal government struggles to secure the support it needs to pass legislation for its signature Housing Australia Future Fund, a joint ANZ-CoreLogic report has found that 30.8 per cent of the median income is required to service a new lease, its highest point since mid-2014.
ANZ senior economist Felicity Emmett said the volume of homes being put for sale has dropped at the same time as the numbers looking for a place to rent has jumped.
"Paired with a decline in social housing, rental demand pressures are being felt in all income bracket," Ms Emmett said.
The national rental vacancy rate dopped to 1.1 per cent last month, well below the long-term average of 3 per cent, while the number of homes being listed for rent has plunged to less than 92,000, 38 per cent below the decade average.
CoreLogic Australia head of research Eliza Owen said there had been some "extraordinary shifts" in the rental market in the past three years, including more people choosing to live alone or in smaller households, a rush to the regions during the pandemic that is now unwinding and a strong rebound in migration after borders reopened.
Ms Owen said the surge in interest rates and capacity and supply pressures in the building industry have discouraged many investors, slowing the supply of new rental properties on to the market.
The ACT has one of the more affordable rental markets, with new rentals costing 26.7 per cent of median household income in the March quarter, down from 28 per cent a year earlier, the ANZ-CoreLogic research shows.
This compares with above 50 per cent in parts of regional NSW, such as Richmond-Tweed and well above 30 per cent across large parts of Sydney, particularly the eastern and inner suburbs.
Sydney also has the worst affordability for home buyers. ANZ-CoreLogic estimate it would take about 12 years for those on median incomes to save a 20 per cent deposit and servicing the mortgage would consume 51.6 per cent of their income.
The government has said its $10 billion Housing Australia Future Fund will build 30,000 new social and affordable homes over five years. But the plan is opposed by the Coalition and the Greens.
Despite this, the government claims it has helped more than 50,000 people into home ownership in the past 12 months, including 1060 in the ACT.
According to the government, more than 6000 have benefited from Regional First Home Buyer Guarantee and deals struck with the states and territories under the National Housing Accord will deliver 10,000 affordable homes over five years from 2024.
Housing Minister Julie Collins said the government had "got construction under way on affordable rental homes across the country, and concrete plans on building tens of thousands more".
Ms Collins said the government's policies, such as the 15 per cent increase in Commonwealth Rent Assistance, were "helping those who need it most" and called on the Coalition and the Greens to "stop grandstanding and start helping Australians in housing stress".
National leader David Littleproud said the nation need to boost the supply of housing quickly, and said consideration should be given to converting unused offices into apartments.
"What's held us back is state and local governments. [They] need to work quicker with that planning pen and get the supply up as quick as they can," Mr Littleproud said.
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