The average Australian now spends over $30,000 per year on rent, the highest number ever seen in the country.
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Last month, the median Australian rent surpassed $600 per week for the first time ever, setting a new record high.
The median rent has skyrocketed since August 2020, when median rent values were at just $437 per week. Since then, rents have lifted by $8,000 per annum, bringing the average annual cost of rent to $31,252.
To put this into context, for rental spending to be within the “affordable” threshold of 30 per cent of household income, the average Australian household must have a total income of at least $94,000 after tax in order to comfortably afford rent.
CoreLogic head of research, Eliza Owen, stated: “The $601 median is a series high, and coincides with total annual rent increases of 8.3 per cent nationally.”
Ms Owen indicated several contributing factors behind this series of consecutive rental hikes since the onset of the pandemic in 2020.
She pointed to “a notable decline in the average household size from late 2020, partly driven by a reduction in share housing – meaning more dwellings were needed even when population growth was close to zero in 2021”.
Once borders were reopened in late 2022, rental demand surged even higher. Other longer-term factors, such as a reduction in social housing supply and a declining rate of home ownership, also increased demand for rental housing.
Ms Owen said: “Rent value increases have broadly outpaced wage and income rises at the national level, meaning rental affordability has also deteriorated.”
In March 2020, the portion of gross household income required to afford median rent was 26.7 per cent. By September 2023, this had risen to 31 per cent.
“While a far higher portion of median income is required to service a new mortgage, renters tend to be on lower incomes,” said Ms Owen.
“The latest data from the ABS suggests median gross household income was 41.8 per cent lower across renting households than owner-occupiers with a mortgage.”
In capital cities, median rents could be even higher than the national median. In Sydney, the median rent is now $745 per week; and in some areas, like the northern beaches and eastern suburbs, the median weekly rent is over $1,000.
The cheapest median rent was in Hobart, where a -3.5 per cent rental decline last year saw the median rent drop to $535 per week.
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