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Australians are facing the most challenging rental conditions in nearly two decades, with affordability declining across all income levels.
The latest PropTrack Rental Affordability Index paints a stark picture of tenants’ financial strain as surging rents continue to outpace income growth.
The report showed a dramatic decline in rental affordability since the late 2010s and early 2020s.
In 2020–21, 60 per cent of rentals were considered affordable, dropping to 55 per cent in 2021–22.
However, according to the report, conditions have deteriorated even further, with only 36 per cent of rental properties being affordable, in 2024, to a median-income household of $116,000 per year.
PropTrack senior economist and report author, Angus Moore, said that Australian renters are facing the most challenging conditions in at least the last 18 years.
“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.
Surging rents remain the key factor behind declining affordability.
According to the data, the median advertised rents rose nationwide by 6.8 per cent in 2024, far outpacing wage growth and inflation.
In Australia, rising rents have hit lower-income households and the younger generation the hardest.
Across the nation, 30 per cent of renting households earning less than $64,000 annually have to use 40 per cent of their income for rent.
Similarly, households earning $70,000 annually can only afford 2 per cent of the rental prices advertised in 2024–25.
The report showed that if they wanted to afford one in five rental properties currently on the market, lower-income households would have to dedicate 36 per cent of their income to rent.
In contrast, the recommended affordability benchmark is set at 25 per cent.
Young Australians are bearing the brunt of the rent affordability crisis, with 84 per cent of households aged 15–24 renting with a lower income.
The report showed that in late 2024, a median-income household in the 15–24 age group could only afford 19 per cent of advertised rentals.
Similarly, 56 per cent of those aged 25–34 live in a rental property.
With rental property becoming less affordable, young Australians are forced to stay with their parents or in shared housing longer, delaying household formation.
Additionally, data showed that rental prices have increased across the board, with properties in the 10th percentile jumping from $280 per week to $430 per week, a 54 per cent rise in just four years.
Alongside young adults and lower-income households, retirees also face severe affordability challenges, with 13 per cent of those over 75 relying on the rental market, often renting from private landlords.
The rental increase has impacted all walks of life, including high-income households earning around $177,000 annually, which are struggling with shrinking affordability nationwide.
In 2024–25, just 83 per cent of advertised rentals were affordable to high-income earners, the lowest share on record.
Although rental affordability continues to be increasingly challenging across the country, Moore said the report showed improvement.
“While rents are still likely to grow this year, we expect the pace of growth will continue to moderate.”
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