Rental Affordability Index

National Shelter, Community Sector Banking and SGS Economics and Planning have formed a partnership to develop and release the Rental Affordability Index (RAI) every six months. It is an easy to understand indicator of rental affordability 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.

The following household types are examined in detail by the RAI:

  • Average income households
  • Family households
    • The 20% of households within the lowest household income quintile (Q1)
    • The 20% of households within the second lowest household income quintile (Q2)
  • Non-family households (primarily lone person households)
    • The 20% of households within the lowest household income quintile (Q1)
    • The 20% of households within the second lowest household income quintile (Q2)

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 income/qualifying income)*100

*Qualifying income refers to the income required to pay rent where rent is 30% of income

Information on the first release of the Rental Affordability Index is available below.

Quarterly analysis

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

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

Rental Affordability Index: Release Report - Quarter 2 2015

Interactive Map of Rental Affordability for Average Income Households (compatible with Chrome and Safari)

Use the slider bar at the bottom of the map to change time periods