It is relatively cheap for an area where similar-sized properties rent for more than $600 a week. "It would be reasonable for two single people sharing, as were the tenants prior to me," she said. "But I'm a single parent on a single income and I've been raising my son on my own since I was three months' pregnant." The latest Rental Affordability Index, released on Wednesday, found Sydney the least affordable region in Australia, with average income households paying 29 per cent of income on rent. The least affordable suburbs were the Sydney CBD, Darling Point, Edgecliff and Point Piper, where households on average annual earnings of $90,000 would pay 87 per cent of income on rent – far in excess of the threshold of 30 per cent at which people struggle to pay for basic needs such as food, air-conditioning, medicine and transport. An average-income household would have to pay 73 per cent of earnings for a three-bedroom property in Paddington and Centennial Park, while rents for similar-sized dwellings in Bronte, Waverley, Kirribilli and Milsons Point consume 72 per cent of average income.

The RAI report found rents remained "severely to extremely unaffordable" within a 10-kilometre radius of the Sydney CBD, with the average household facing rents of more than 60 per cent of their total income in some inner-city suburbs. "Rents like these push working households to the outer fringes, to places like Blacktown and Liverpool, and to suburbs with poor access to transport, jobs, services and education," said Ellen Witte, a partner at SGS Economics and Planning. The index, compiled by peak housing advocate National Shelter, Community Sector Banking and SGS Economics & Planning, found Hobart was the second-least-affordable region in Australia, with average income households spending 28 per cent of their earnings on rent followed by Brisbane, Adelaide (both 25 per cent) and Melbourne (24 per cent). Renters in regional NSW also faced steep costs, with rents costing 27 per cent of average household earnings of $62,900.

Shelter NSW chief executive, Karen Walsh, said: "What is shocking is that if you are a single person on a pension or a single person on a benefit, there is nowhere in New South Wales you can rent a one-bedroom unit that is affordable. "If you are a couple receiving a pension, looking for a two-bedroom unit, you need to move west of Bathurst or to the Hunter to avoid rental stress." Ms Walsh said Sydney's housing affordability crisis posed a threat to the economy. "Where do the workers who support our economy live?" she said. "The administration staff, child care workers and the staff who help to prepare our food and serve us in cafes, restaurants and bars – where do they live? And the retail staff who will be working extended hours in the lead-up to Christmas – do we expect them to travel an hour for low wages?" A community services worker, Tamara spends "almost half" of her income on rent, with the remainder spent on household bills – electricity, telephone, internet – as well as medical bills for her 13-year-old son, Oskar, who has asthma and allergies.

"I don't go out and I don't buy stuff for myself," she said. "If anyone needs clothing, it's my son, and I'll always make sure he's got clothing and shoes before myself. "I couldn't afford school uniforms and school shoes, so the school actually had to help me out with those things." Despite living frugally, Tamara said, she had accumulated "unavoidable debt" to pay for essential items such as child care. "I can be quite resourceful, but on the other hand, I struggle from pay to pay to meet bills and to make sure that Oskar is okay and he's got what he needs," she said. Tamara said she had chosen to remain in Sydney's inner west, close to friends and her work and to provide a stable home environment for Oskar.

"I'm just trying to give him a better start, and have that stability, because our friends are like our family," she said.