Rental affordability rate drops to lowest level

Andrew Brown |

Median-income households can only afford 39 per cent of available properties to rent, a report says.
Median-income households can only afford 39 per cent of available properties to rent, a report says.

The affordability of rental properties has reached its worst level since records began, a report has found.

The latest PropTrack Rental Affordability report found households on the median income of $110,000 per year could only afford 39 per cent of available properties to rent.

It’s the lowest figure for affordable rentals since the report started tracking the affordability measure 17 years ago.

The figures were based on a typical household that would spend one-quarter of their income on housing.

For a household earning $49,000 a year, the report found there were practically no affordable properties available to rent.

PropTrack senior economist Angus Moore said the figures were driven by a 38 per cent surge in rental prices since the pandemic.

“Over the six months to December 2023, households across the income distribution system could afford to rent the smallest share of advertised rentals since at least 2008,” he said.

“The deterioration in affordability has been driven by the significant increase in rents that we’ve seen since the pandemic, which wages have not kept up with.”

Those living in NSW, Tasmania and Queensland had the worst affordability levels of any jurisdiction.

Those in Sydney have a median rent of $700 per week as of December 2023, at least $100 more expensive than the capital city median.

The report found median-income households could only afford to rent 28 per cent of rentals advertised in the last six months of 2023.

Victoria was revealed to have the most stable amount of renters, with just more than half of rentals available for median incomes.

However, the past 12 to 18 months have seen affordability levels still sharply deteriorate, with increases in advertised rents of 18.3 per cent in Melbourne.

Mr Moore said a boost in housing supply was a way for the issue of surging rents to be addressed.

“Longer term, increasing the availability and supply of rentals is critical to improving affordability,” he said.

“Rents are growing quickly because rentals are extremely scarce at the moment, with incredibly low rental vacancy rates around the country.”

AAP