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Rising rents and stagnant incomes have substantially changed Perth’s affordability in the space of only a year.
According to the latest National Shelter-SGS Economics and Planning Rental Affordability Index, released on 22 November, Perth has now become Australia’s least affordable capital city, based on the metric of comparing rental costs with average income.
The index, now in its 10th year, analyses the medium rental price and the average income of rental households within each capital city or regional area. A score of 100 indicates that households are spending 30 per cent of their income on rent, which is the critical threshold for housing stress. A score below 100 indicates poor affordability, with lower scores representing higher levels of housing stress. This year, the index introduced a new “critically unaffordable” category, highlighting areas where households are paying 75 per cent or more of their income on rent.
The index revealed that Perth’s rental affordability has dropped by 13 per cent in the past year, making it less affordable than Sydney for the first time in the index’s history.
The index also highlighted that affordability in regional Western Australia has plummeted to record lows, as rent hikes have outpaced income growth over the last four years.
Weighing in on the finding Shelter WA’s Sofie Wainwright stated that single jobseekers and pensioners in both Perth and regional Western Australia face “critically unaffordable” rental markets, while part-time workers receiving parenting payments find the area “extremely uncomfortable”.
Wainwright noted that single hospitality workers experience “extreme unaffordability” in Perth, with conditions worsening to “severely unaffordable” in the rest of the state.
Shelter WA chief executive officer Kath Snell emphasised the human toll of the crisis.
“Families who have never experienced homelessness before are sleeping in cars and tents because they cannot afford the rent,” Snell said.
Snell stressed the need for urgent action to address the rental market’s failures.
“Not only is Western Australia the worst in the country for rental affordability, WA lags behind most states and territories when it comes to rental standards and protections,” she added.
Snell called on the state government to cap unfair rent increases, ban no-ground evictions, and introduce minimum standards for rental properties.
“It’s past time the WA government provided a better deal for renters” she stated.
Wainwright noted that the medium weekly rent in Perth has reached $629, consuming 31 per cent of the medium household income, surpassing the 30 per cent threshold for rental stress. In regional Western Australia, the medium weekly rent of $572 accounts for 26 per cent of household income, disproportionately affecting non-mining workers.
Ellen Witte, principal at SGS Economics and Planning, pointed to the significant decline in rental affordability in Greater Perth, which now has a record-low Regional Australia Institute (RAI) score of 98, placing the city in the “unaffordable” category for the first time.
From mid-2020 to 2024, the median rent in Perth has risen from 20 per cent to 31 per cent of household income, while regional Western Australia has seen a similar rise, from 19 per cent in 2020 to 26 per cent this year.
In comparison to Perth, Greater Sydney and Adelaide’s median rent reaches 30 per cent of household income, with Greater Brisbane and Hobart following with 29 per cent and 28 per cent, respectively. On the lower side, Greater Melbourne marks 35 per cent of the medium rent of household income and the ACT sits at the bottom with 23 per cent.
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