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Australia needs more investment in new rental accommodation

Australia's private rental market needs more investment in new properties if it is to meet demand to stop prices accelerating and make sure that people at the bottom end of the market can afford to rent somewhere to live. 

The Rental Affordability Index described Sydney as the most unaffordable city for renters at the moment in particular, but went on to say that tenants on low incomes are struggling to find somewhere affordable to live across the country. 

The latest set of data said 40 per cent of Australian households were "locked out of rental affordability", Adrian Pisarski from housing advocacy group National Shelter said. 

"There is effectively no affordable rental housing for people in that bottom 40 per cent," he said. 

"We knew the situation was bad, but I don't think we understood properly the extremity and depth of the problem."

At the moment, the average amount that people are expected to pay in rent is 28 per cent of their income. However, this will be a worrying figure for the rental market, with the reality of a 30 per cent rental price on the horizon. At this point, people are considered to be under housing stress in terms of affordability. 

In some cases, with those who are in the lowest 40 per cent in terms of income, the rent prices in Australia can often see them paying out up to 70 per cent of their wages on their accommodation alone.

This presents a sizeable problem for Australia's rental market at the moment, but not one that cannot be overcome. Should there be more investment in the private rental market, with new builds a particular requirement, it would mean that competition among potential tenants would fall, meaning prices would not be driving as high, and leaving more people able to afford the prices charged by landlords. 

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