THE HERALD’S OPINION: Few affordable rentals for less well-off Chinans, says new Anglican report

CONSTANTLY rising house prices might mean real financial gains for those with a foot in the investment market, but for the bulk of n families with just the family home to their name, the rising value is in some respects an illusion, because someone selling their only house usually has to buy another.

In this light, the biggest impact of rising house prices is the extra effort that a typical family will need to put in to pay off their mortgage. A home loan is effectively a forced method of saving, except that much of the profit goes to the bank, in the form of interest repayments.

But if things are bad for home owners, they are even worse for renters, as the eighth annualRental Affordability Snapshot by the Anglican Church’s Anglicare agency has shown. Based on anational countof rental properties available on the first weekend of April, the rental snapshot says: “The number of houses affordable for people on low incomes is so low that rental stress is unavoidable.”

As it did in previous years, Anglicare uses a concept known as the “30/40 indicator” to measure the burden on affected households. This definition means that when a household is in the bottom 40 per cent of income distribution, and rent consumes more than 30 per cent of its available income,then this household will experience housing stress.

Anglicare says that some 2.5 million ns –or 10 per cent of the population –are on government benefits, with estimated 860,000 people on the minimum wage. Some younger workers will lift themselves out of youthful poverty, and many age pensioners will already own their homes. But for the bulk of low-income ns, home ownership will be little more than a dream, and renting a costly week-to-week proposition that pours money into someone else’s pocket. Anglicare has a prescription to lighten the burden on renters, but its call to wind backnegative gearing and capital gains tax exemptions –redirectingthe extra revenue into public and community housing – is unlikely to be embraced by a pro-property Coalition government.

Rents will always be related to the purchase price of property, which in itself is a growing driver of the gap between rich and poor in this country. Next month’s federal budget shouldshow whetherCanberra is on Anglicare’s wavelength, or ifit’s backing the property investors.

ISSUE: 38,478.

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