National rental market worst on record

Soaring rental costs mean more Australians are struggling to pay their rent as affordability levels fall to a record low.

Soaring costs mean Australian renters are being priced out of the market as affordability levels fall to a record low.

Not since 2008 has rental affordability been so bad, PropTrack figures show.

Households earning a median income of $116,000 could only afford 36 per cent of the advertised rental properties from July to December 2024, while lower-income households earning $70,000 could afford just 2 per cent of homes.

Australians are paying a higher percentage of their wages on rent. Picture: NewsWire / Andrew Henshaw

PropTrack senior economist and report author Angus Moore said Australian renters faced their toughest conditions in the last 18 years, as wages failed to keep up with rents.

“The current alarming state of rental affordability is a substantial deterioration from conditions before and during the pandemic,” he said.

“For lower-income households, renting is essentially impossible.

“This highlights just how crucial Commonwealth Rent Assistance and community housing is for lower-income Australian households.”

Rents nationally since the Covid pandemic have soared 48 per cent, while the average household income has only jumped 19 per cent, putting further pressure on those who do not own a home.

Melbourne has become the most affordable city to rent in. Picture: NewsWire / Andrew Henshaw

The figures are based on households spending 25 per cent of their pre-tax income on rent, meaning the median household earning $116,000 a year could spend up to $555 per week on rent to fall under this threshold.

Rental affordability remains toughest in NSW, though South Australia and Tasmania are not far behind.

Victoria stands out as the most affordable state to rent in by some margin on the back of Melbourne rents not growing nearly as much as other capitals since the pandemic.

The most and least affordable states in Australia. Picture Supplied

Mr Moore said rental affordability was disproportionately impacting younger people starting out in their careers.

While rents remain high, the pace of growth is starting to slow.

“The silver lining for renters is that conditions appear to be improving. Rental availability, while still limited, is starting to increase and the pace of rent growth is slowing. While rents are still likely to grow this year, we expect the pace of growth will continue to moderate,” Mr Moore said.

Originally published as National rental market worst on record