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The latest REA Group Rental Affordability Report revealed a grim outlook for renters in Australia, indicating the worst levels of affordability since records began in 2008.
This decline is largely attributed to a sharp increase in rental prices over the past four years.
According to the report, only 36% of rentals were affordable to households earning the median income of $116,000 during the latter half of 2024, marking a new low.
The situation is particularly dire in New South Wales and South Australia, where typical households can afford just 26% and 20% of available rentals, respectively.
Conversely, Victoria remains the most accessible state for renters, with affordability levels similar to those of the mid-2010s.
The REA Group report highlighted a distressing scenario for lower-income earners, with those making $70,000 annually — in the 30th income percentile — able to afford a mere 2% of the advertised properties.
Angus Moore (pictured), PropTrack’s senior economist and author of the report, emphasised the severity of the situation.
“Australian renters are facing the toughest conditions in at least 18 years,” Moore said.
He pointed out that while rents have surged by 48% since the onset of the pandemic, income growth has lagged significantly, increasing by only 19% in the same period.
Despite these challenges, there are signs of a potential easing in the rental market.
Availability is improving in capital cities, and although rent growth remains high, it has begun to slow compared to previous years, with further moderation expected throughout the year, REA Group reported.
The affordability crisis has not only impacted renters but also shapes up as a significant issue in key electoral battlegrounds, particularly in areas like Perth and Sydney where rents have surged by over 50% since 2022.
These increases are likely to influence voter behaviour in the upcoming federal election, especially in suburbs where the cost of living and housing affordability are pressing concerns.
As the federal election approaches, housing policies are becoming a focal point for major parties.
The Labor government has focused on initiatives such as the Help to Buy scheme and a $10 billion fund for social housing, while the Coalition proposes cuts to migration and increased funding for infrastructure to boost housing supply.
Additionally, the Greens advocate for rent control measures and a significant increase in public housing construction.
More information can be found on realestate.com.au.
