Sydney’s economy will get an almost $20 billion boost if government invested in affordable housing in the inner city, slashing commute times and increasing job opportunities for the city’s workers, researchers say.

Unaffordability is steadily spreading “like an oil stain” to middle and outer suburbs, according to SGS Economics and Planning partner and index author Ellen Witte. According to the latest rental affordability index, even a typical Melbourne household pocketing almost $90,000 in income would struggle to find an affordable family home to rent within 15 kilometres of the city centre. The index – which tracks rental affordability using census data on household incomes and rental bond information lodged with government departments – found the median rental household in greater Melbourne earned $88,400 each year.

The cost of renting in Sydney has improved but many tenants still struggle to make ends meet, new analysis shows. A biannual report on rental stress reveals a marginal improvement in affordability, but the gains have made little difference for low-income households. The average rental household in Greater Sydney put 27 per cent of their income towards rent in the June quarter, the latest Rental Affordability Index, by National Shelter, Community Sector Banking, SGS Economics & Planning and the Brotherhood of St Laurence, released on Thursday shows.

Just 118 new apartments were added to Victoria’s pool of public housing last financial year, despite a waiting list topping 82,000 people – including 24,000 children – data from the Department of Health and Human Services shows.

Transport accessibility is critical to the government's ambitions for the GPOP area. "We've got an opportunity here to align the land use planning with the transport and other infrastructure planning." - Alison Holloway, principal and partner at SGS Economics.