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Rental Affordability Index

Rental Affordability Index

National Shelter, Community Sector Banking and SGS have released the Rental Affordability Index (RAI) on a biannual basis since 2015. A price index for rental housing markets, the RAI is an easy to understand indicator of rental affordability relative to household incomes. It is applied to geographic areas across Australia.

It is generally accepted that if housing costs exceed 30% of a low income household’s (households with the lowest 40% of income) gross income, then that household is experiencing housing stress (30/40 rule). In the RAI, households who are paying 30% of income on rent have a score of 100, indicating that these households are at the critical threshold for housing stress. A score of 100 or less indicates that households would pay more than 30% of income to access a rental dwelling, meaning they are at risk of experiencing housing stress.

To better illustrate the situation for vulnerable groups, we assess the rental affordability situation for eight Australian household types. These are:

  • Single pensioner
  • Pensioner couple
  • Single person on benefits
  • Single full-time working parent
  • Single income couple with children
  • Dual income couple with children
  • Student sharehouse

The RAI is calculated using the following equation, where ‘qualifying income’ refers to the household income required to pay rent where rent is equal to 30% of income.

RAI = (Median incomeQualifying Income) x 100

Quarterly analysis

Rental Affordability Index: Release Report - Quarter 2 2017 (released 29 November 2017)

Rental Affordability Index: Release Report - Quarter 4 2016 (released 17 May 2017)

Rental Affordability Index: Release Report - Quarter 2 2016 (released 23 November 2016)

Rental Affordability Index: Release Report - Quarter 4 2015 (released 16 June 2016)

Rental Affordability Index: Release Report - Quarter 2 2015