Six figures or out: income needed for typical rental
Jacob Shteyman |
Australian households on less than six-figure incomes are struggling to make rent for a typical capital city house, underscoring the depth of the nation’s housing affordability challenge.
To afford the median rental house, a household must earn more than $112,000 a year – a 51 per cent increase compared to 2019 – according to a report released by property listings marketplace Domain on Thursday.
Before the pandemic, the income required to fall below the standard benchmark of rental stress – spending more than 30 per cent of income on rent – for a median house was $74,533.
Rents have since outpaced growth in incomes, making large swathes of the nation unaffordable for many renters.
That has resulted in lower living standards for renters and made it harder for employers in many suburbs to find essential workers.
Across the capital cities, a two-person household earning average wages would spend 21.1 per cent of their income renting a typical home.
The data demonstrated a particular challenge for people on a sole income, with individual earnings sitting around $80,2000 on average, Domain senior economist Joel Bowman said.
“So for those single-income renters, it can be quite a struggle to be able to rent a typical-priced house in most of these markets,” he told AAP.
Unsurprisingly, Sydney’s rental market is the most challenging, with $135,200 a year required to afford a median house and $130,000 for a typical unit.
While there remain some pockets of affordability in the outer suburbs – like in Willmot, where an individual on an annual income of $84,933 can afford the median weekly rent of $490 – the incomes needed for more ritzy locales closer to the CBD are astronomical.
To live in Australia’s least affordable suburb – Vaucluse – renters must be raking in a household income of $511,333 per year.
Perth, Brisbane and Adelaide have all experienced strong growth in rents since 2019, with the median house now accounting for more than 21 per cent of a typical household income across all three cities.
Perth had the largest relative rise of any city, with house rents only taking up 13.9 per cent of median income in 2019.
According to property data firm Cotality, the median rental nationally was $671 a week in September – 53.3 per cent higher than the same time five years earlier.
Over the same period, median incomes increased by just 20 per cent.
AAP
