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Australia’s affordability crisis has grown further following rental cost increases and stagnant income growth, with NSW and South Australia deemed the “worst” markets for renters.
According to the PropTrack Rental Affordability Index, rental affordability deteriorated significantly from July to December last year, reaching its lowest point since at least 2008.
The decline has been driven by soaring rents over the last four years, which have outpaced income growth and placed further strain on renters.
PropTrack senior economist and report author, Angus Moore, said that rental affordability has significantly worsened compared to both pre-pandemic levels and during the pandemic.
“Rents nationally are up 48 per cent since pre-pandemic, while typical household incomes have only increased 19 per cent in the same period,” Moore said.
PropTrack’s Rental Affordability Index indicated that NSW remains the least affordable state for renters.
The report showed that Sydney was driving rental affordability challenges in NSW and was the most expensive rental market nationwide, with a median rent price of $730.
Sydney’s median rental costs are up $90 more than the other capital cities’ median rental prices.
PropTrack indicated that South Australia’s rental affordability has deteriorated since the pandemic, with Adelaide’s rent surging 55 per cent since 2020, far outpacing income growth.
South Australia has now become the second-least affordable state for renters.
The data showed that in 2024, advertised rents in Adelaide and regional South Australia increased by 7.4 per cent and 8.1 per cent, respectively.
PropTrack data reported that rental costs in Brisbane and regional Queensland have also sharply increased, reaching $230 and $240 per week, respectively.
Rental affordability in Queensland has reached its lowest level on record, with households able to afford the smallest share of rentals since 2007–08.
It also noted that since late 2020, median advertised rents in Brisbane have surged by 50 per cent, while regional Queensland saw a 54 per cent increase, far outpacing income growth and worsening affordability.
Conversely, Tasmania’s rent growth has been comparatively slower, as the city has remained expensive since before the pandemic.
PropTrack indicated that since its worst point in 2022–23, Hobart’s rental affordability has improved, with rents rising just 5 per cent.
However, data showed that Tasmania remains the third-least affordable for rent, with only 19 per cent of advertised rentals accessible to households earning the median income of $83,000.
While Victorian rental affordability has worsened since 2021–22, it has not deteriorated as sharply as in other states, remaining more renter-friendly than other regions.
The shift in Victoria as the most affordable state is a relatively recent development, as Victoria was the second-least affordable state in as recent as 2016–17.
Victoria’s rental affordability has improved relative to the rest of the country due to slower rent growth in Melbourne.
At the end of 2024, Melbourne’s median advertised rent was $570 per week, the second-cheapest city to rent in, despite its high incomes.
While Melbourne rents have risen 32 per cent since March 2020, this is far below the national growth rate of 48 per cent.
Despite affordability hitting a record low across all states, Moore said the report indicated signs of improvement.
“Rental availability, while still limited, is starting to increase and the pace of rent growth is slowing,” he said.
“While rents are still likely to grow this year, we expect the pace of growth will continue to moderate.”
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