Regional NSW Loses Affordable Edge Over Sydney
A shocking new report reveals that the Illawarra region no longer has a single postcode where average rental households spend less than 30% of their income on rent. The 11th annual National Shelter-SGS Economics and Planning Rental Affordability Index, released in November 2025, confirms that regional NSW has lost its affordability advantage over Sydney.
Essential Workers Priced Out of Housing Market
The situation is particularly dire for essential workers. The report found that a first-year nurse earning approximately $72,000 before tax would struggle to find any one-bedroom home in the Illawarra that consumed less than 30% of their income. For hospitality workers seeking one-bedroom accommodation, the search extends as far as Appin or Nowra to find something adequate.
Student share houses have reached crisis levels, with rents consuming between 38% and 60% of income across most Illawarra postcodes. Similarly, pensioner couples cannot find affordable two-bedroom dwellings anywhere in the region.
Personal Stories Highlight Human Cost
Lou Housego, a retired NSW Nurse and Midwife Association member, represents the human face of this crisis. She was forced to return to work after retirement because her pension couldn't cover rental costs. "I just feel like I can never stop working," she shared. "As I'm ageing, I feel like I should have the right to retire, I don't feel like I have that anymore."
Ms Housego now spends over 50% of her combined pension and work income on rent, forcing difficult choices about medical care, food, and transportation. "It isolates you totally because you can't just think, 'Oh, I'll go to the beach today' - it might be a free activity, but to get there it costs you money," she explained.
Economic Impacts Beyond Social Crisis
Robert Pradolin, Founder and Executive Director of Housing All Australians, emphasizes that the rental crisis is damaging regional economies. "Whether they are in light manufacturing, mining or horticulture, businesses across regional NSW are struggling to find staff because there's simply nowhere affordable for them to live," he stated.
Pradolin argues that housing must be viewed as critical economic infrastructure rather than purely a social issue. The data supports this concern, showing dramatic declines in rental affordability. In the 2500 postcode, the Rental Affordability Index has plummeted from 100 in 2020 to just 86 in 2025.
The north Illawarra postcode 2515 (Thirroul to Clifton) recorded the region's worst affordability score of 67. With scores below 100 indicating households pay more than 30% of income on rent, these figures reveal a region in severe housing distress that shows no signs of improvement.
