Rental affordability in Australia has plummeted to its lowest point in nearly two decades, marking a significant challenge for households across the income spectrum, according to the PropTrack Rental Affordability Report – 2024.
“Surging rents over the past few years mean renters across Australia are now facing the worst level of rental affordability in at least 17 years,” said Angus Moore (pictured above), senior economist at PropTrack.
“The PropTrack Rental Affordability Index shows that, over the six months from July to December 2023, households across the income distribution could afford to rent the smallest share of advertised rentals since at least 2008.”
This situation represents a significant shift from the pre-pandemic period, where rental affordability was gradually improving due to rents increasing at a slower pace than incomes
The PropTrack report found that rental affordability has dramatically declined, particularly in New South Wales, Tasmania, and Queensland, where households struggle the most to find affordable rental options. Conversely, Victoria remains the most affordable state for renters, despite significant declines in affordability over the past few years.
The decline in affordability is attributed to a substantial increase in rents since the pandemic began, which has outpaced wage growth.
The report highlighted a particularly alarming trend for median-income households, which can now afford just 39% of rentals advertised over the latter half of 2023. This represents the lowest share since records began in 2008 and a substantial decline from the more favourable conditions seen before and during the pandemic.
“Even relatively high-income households earning about $170,000 a year — more than 70% of Australians — are facing more challenging rental conditions than they have in some time,” Moore said. “These households could afford 85% of advertised rentals in 2023-24 – a substantial fraction, but nonetheless the worst since 2008-09, and down from a high of 91% in 2020-21.
The primary driver behind the deteriorating rental affordability is the rapid increase in rents, which surged by 11.5% in 2023 following a 15.6% growth in 2022. Compared to the period before the pandemic, rents nationally are up by 38%, significantly impacting affordability.
See the full report: PropTrack Rental Affordability Report – 2024.
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