Do we have the world’s toughest rental market?

Samantha Hawley: Hi, I’m Sam Hawley, coming to you from Gadigal Land. This is ABC News Daily. How would you like to live in an apartment barely big enough to fit a double bed or a complex where you share a bathroom with six other units? Or how does a dorm for adults sound? Well, in cities like Tokyo, New York, and London, it’s not an uncommon way to live. So as we grapple with the rental crisis here, how do we compare globally?

Today, Reporter Angelique Lu on weather conditions in Australia are any better. Angelique, we know the rental situation in Australia right now is at crisis point, but you and a team of reporters wanted to find out what it’s like elsewhere in the world if we’re being hit the hardest or if other people are also suffering.

Angelique Lu: Absolutely. Because, you know, in this rental crisis, the number one thing you hear about from people is like, oh, I’m just going to move overseas where it’s better. And so that kind of sparked the inspiration for this project. So we leveraged our correspondents all over the world. Our correspondent in London, Nick Dole, Jade McMillan in New York, James Oaten in Tokyo, and myself in Sydney.

And we kind of gave ourselves a challenge to see if we could find an affordable place to live for 30% of the household income in that city just as a control because that’s what’s recommended for people as an acceptable, affordable expenditure on housing costs, especially if you’re low income.

Nick Dole: For this task, I’ve been given 30% of the median London household income, and a budget of 253 pounds per week.

James Oaten: It means I’ve got the smallest amount of money to spend in this challenge about 420 AUD a week or ¥40,000.

Jade Macmillan: I’ve been given 612 AUD to find a place to live. Okay. So we’re going to unpack this now. It’s going to be quite interesting, I think. Let’s start here in Sydney, though, because you were tasked with finding a rental property here in Sydney and you had that 30% metric to play with.

Angelique Lu: You know what? I think I probably had the hardest city to do this in. So Sydney is the most expensive city to rent in Australia. It’s followed by Canberra, Brisbane, Darwin, and then Melbourne, which I was surprised by. Melbourne’s a bit further down the list and the most affordable place to rent in Australia is Adelaide. And the budget that I was given is a household budget of $620 a week. That’s a household income, so that means it’s usually about two people. So I looked in Dulwich Hill.

Agent: Okay, so you’re going to love this one. It’s a two-bedroom art deco apartment. It’s on the top floor of just two apartments. It’s got heaps of natural light district. So I did.

Angelique Lu: Find somewhere that is within walking distance of the train station. It had two bedrooms a bathroom and access to a yard, and that was about $540 a week. But the bathroom, you know, it was I think the real estate agent said it was an original bathroom.

Agent: This one hasn’t got a renovated bathroom, unfortunately. So it is quite original.

Samantha Hawley: I’ve seen these original bathrooms. I think I have one in the property I’m currently renting as well. It’s pink.

Angelique Lu: Yeah. This one’s a really. I don’t know how to describe the color. It’s like a pastel green, but, you know, very, very 70s. I think so. Very original.

Samantha Hawley: All right. But Dulwich Hill, that’s in the inner west of Sydney, so it’s pretty central. That sounds pretty good.

Angelique Lu: Yeah, it does sound pretty good. However, the rental conditions in Australia are quite challenging. You know, leases from 6 to 12 months are quite common. It’s really rare to get long leases so security is quite tough. Another thing to think about is competition. You know, supply across Australia is at record record lows. And so even when I was looking at this place in Dulwich Hill, there were probably about a dozen parties looking and that property was leased out immediately after inspection.

Samantha Hawley: Okay. So, Angelique, now take me to New York City. Oh, it’d be nice to be there right now, wouldn’t it? Oh, it would be.

Angelique Lu: It would be. So we sent Jade Macmillan to New York, and she had a budget of 612 AUD a week. So she found a place in Greenwich Village in New York.

Agent: Thank you very much for coming. Yeah, no problem. So this is apartment 17.

Angelique Lu : It was 14m². And it’s quite challenging to visualize. But I just want you to imagine a double bed and that’s flat. Oh, gosh. You know, what’s the most outrageous thing? So the bathroom was shared between six units. And the reason I say six units is that you’re not necessarily sharing with six people. It could be couples as well. So you could be sharing a bathroom and shower with up to 12 people. So Jade had to go further afield to look for something a bit more spacious.

Jade Macmillan: This is kind of like an ordinary shared house, except there’s a total of 160 people living in this building split into four-bedroom units.

Angelique Lu: She found something. A shared living space in Brooklyn. It’s a shared living area, kitchen, and two bathrooms. The private space. The bed is quite high up. And, you know, you have to climb up a ladder to get into the bed. And the couch is underneath.

Jade Macmillan: It’s already furnished and the common areas are cleaned weekly. But you don’t get to pick your housemates and you can’t have anyone stay the night. This type of living has been nicknamed dorms for adults.

Angelique Lu: And you know what the most outrageous thing is? That was still over her budget.

Samantha Hawley: So basically, she really can’t afford anywhere decent in New York City on that budget. It’s impossible.

Angelique Lu: Absolutely. I think I’ve been misled by Friends. You know, the TV show, Friends.

Samantha Hawley: Yes. This doesn’t sound quite like Friends. But anyway. All right. So that all sounds a bit grim. So take me then to London. I wonder if it’s any better there.

Angelique Lu: Well, you know, you’re no stranger to the London rental market, but our current London correspondent, Nick Dale, was given a budget of 500 AUD a week to spend on rent. 500 AUD a week doesn’t take you very far in London. So he did find a place it was in East London.

Nick Dole: Judging by the pictures, it does look a little bit rough around the edges, but I think I am going to have to sacrifice a bit to get something that’s within budget.

Agent: Come on in. Thank you. Welcome to our three-bedroom property in East London.

Angelique Lu: It was a short walk to the shops and public transport.

Agent: We have the living room. It comes with a balcony.

Nick Dole: Nice and airy.

Angelique Lu: But really? So the bathroom had no shower, so it was just a bathtub. There was no mirror.

Nick Dole: A small but functional, small but functional. Test it out. Let’s say that it does the job. It works.

Angelique Lu: The place wasn’t painted. You know, the real estate agent was very optimistic. Like you can make your place your own. And I think there was no built-in wardrobe. So, you know, there was like paint missing. But, you know, it comes under budget at $415 a week.

Samantha Hawley: Gosh, good. I’m glad it’s under budget because it sounds like it should be. What’s the other catch to it all?

Angelique Lu: So this property that Nick found is under something called guardianship. So the reason this place was so cheap at $415 a week is that it’s scheduled to be redeveloped. So this building can be demolished at any point. He did find another place, though. It’s at Heathrow Airport, which is a little bit out of London.

Nick Dole: So this is the master bedroom.

Agent: This would be the master bedroom. Yes. There’s a fitted wardrobe in one of each of the bedrooms. Nice. This one has an ensuite. Excellent. This one’s got three bathrooms.

Nick Dole: Three bathrooms.

Agent: You need three bathrooms. You’ve got three bedrooms.

Angelique Lu: It was within budget at $515 a week. It has three bedrooms and three bathrooms. And the train line will take you into central London in about half an hour.

Samantha Hawley: Okay, Well, that doesn’t sound too bad. Pretty convenient if you want to pop on a plane back to Australia, I guess.

Angelique Lu: Yeah. But look, there’s always a catch with these sorts of things. So the reason that that property with the three bedrooms and three bathrooms is so cheap. It’s part of a scheme called London Living Rent. You have to qualify for this scheme and so you have to have a household income of less than 60,000 pounds and it’s incredibly competitive. So again, nothing’s guaranteed.

Samantha Hawley: Yeah, right. So there are catches all over the place. All right. So London and New York City sound pretty tough. What about Tokyo? Tell me about that.

Angelique Lu : So we sent James Oaten to Tokyo.

James Oaten: With more than 39 million people. Greater Tokyo is the most populous city in the world. It’s notoriously packed and it’s famously tiny apartments. It means renting here can give you a little bang for the buck.

Angelique Lu: And, you know, Tokyo is quite notorious for having small and packed apartments, as you can imagine. Also, he had a little bit of a harder time than us because incomes are a bit lower compared to the other cities we’ve been to. So he had the lowest budget. He had a budget of 420 AUD a week. He did find somewhere that was slightly above that price. It was 32m², which is double the size of what Jade found in Greenwich.

James Oaten: Yeah, let’s have a look.

Agent: Here we are. Yeah. Take off your shoes in front of the apartment because that’s what you do in Japan. Yeah. Just keep them right there. And first off, you’ll notice it’s a little bit, well, cramped.

Angelique Lu: You know, it’s pretty small by Australian standards. It had a tiny bathroom, you know, one of those fancy Japanese toilets.

James Oaten: Oh, and is this one of those fancy Japanese toilets?

Agent: Yes, This one is a wet room-style bath. Right. So you can get everything wet in here and not have to worry about it.

Angelique Lu: And it was in the heart of the action as well. He went out an hour’s drive from the city center and he found a two-bedroom place for about $383. So it’s an hour’s drive, so it’s a little bit out of town. But what makes Tokyo unique is that it does have good public transport so you can get into the city center in half an hour.

James Oaten: Now this is one of the best things about living in Tokyo.

James Oaten: So we’re taking the Special Rapid Train. It runs a few times an hour and only takes 25 minutes.

Samantha Hawley: Well, let’s stay then Angelique in Tokyo because it sounds like James may have had a slightly easier run of it with trying to find a rental property than the correspondents in London and New York. And within a smaller budget. So it sounds like they’re doing something right in Tokyo.

Angelique Lu: So Tokyo and Japan, in general, are unique because Tokyo doesn’t have a housing shortage. And, you know, this has been attributed to the fact that Tokyo has a much simpler zoning law than most other Australian cities. They have 12 zones, so homes and apartments can be built in all of the zones except one, which is the business zone. And there are also no laws about minimum sizes for apartments. So, you know, they can be as small as 15, 10, or even eight square meters, which is very small. Yeah.

Samantha Hawley: I don’t think I’d get all my clothes in there.

Angelique Lu : No, not at all.

Samantha Hawley: My gosh. Okay. So what prompted the change to their zoning laws?

Angelique Lu: So there was a housing crisis in Tokyo early last century and that prompted the Japanese government in 1968 to change the zoning rules. And that completely changed the dynamic. So it means that the market can quickly adapt to demand. And so you’re able to you know, build more residential apartments in a lot of zones.

Samantha Hawley: I’m not sure how Australians would feel about those Liberal zoning laws here. We’ve heard about the NIMBYs not in my backyard who are really against any development in their local area. It might not go down so well here.

Angelique Lu: No. And you know, and you see that in the housing debates across the country. We’ve got the New South Wales Premier Chris Minns. He’s coming up on a platform of trying to overhaul housing density reforms. And you know, Dan Andrews in Victoria, he’s talking about taking powers away from the council.

But of course, you know, when you’re talking about zoning, you’re talking about, you know, the balance between public transport, infrastructure, schooling, heritage, and also, of course, people are worried about the value of their properties. So a lot of people find the idea of, you know, lax development planning laws quite controversial, unlikely to happen here in Australia.

Samantha Hawley: So Tokyo doesn’t have a problem with supply and it doesn’t have a problem with the so-called NIMBYs particularly. So does it win this global race, do you think, in the rental battle?

Angelique Lu: You know what I have to say, I think Australia comes out looking quite good. So overall we going through a rental crisis here in Australia. But as we’ve seen, this is a problem that’s happening all over the world.

Samantha Hawley: We should thank our lucky stars if we have a shower by the sounds of it.

Angelique Lu : Yes, I think so. I think so. Or maybe not. The impending threat of demolition, maybe.

Samantha Hawley: Angelique Liu is a reporter based in Sydney. If you want to know about the Government’s latest plan to try and fix the rental crisis, we covered that last Tuesday the 22nd and that’s in your feed. This episode was produced by Veronica Apap, Lara Corrigan, Sam Dunn, and Anna John, who also did the mix. Our supervising producer is David Coady. I’m Sam Hawley. To get in touch with the team, please email us on ABC News Daily at abc.net.au. Thanks for listening.