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A national vacancy rate of just 1.41 per cent means Australians are well and truly feeling the pinch.
Suburbtrends’ Rental Pain Index for March 2024 has shone a light on the “escalating crisis within Australia’s rental market” across all states and territories.
With an average national rental increase of 10.56 per cent, Suburbtrends has pointed out that such an increase necessitates 30.59 per cent of income be dedicated to rent across the country, while the national vacancy rates sits at just 1.41 per cent.
The situation is most dire in Western Australia, which the report flagged as now exhibiting the highest levels of rental stress.
The state saw an “unprecedented” average 12-month rental increase of 16 per cent, while the average vacancy rate sits at just 1.13 per cent.
It means Western Australians are now required to fork out more than 30 per cent of their income to have a roof over their heads, with the report placing their Rental Pain Index (RPI) score at 84.29 – the highest across the country.
Queensland and South Australia are not too far behind, with both states seeing rental increases over the past 12 months of around 10 per cent.
Queensland’s RPI score is sitting at 82.63, with tenants now forking out 31.87 per cent of their income on rent, while South Australia’s RPI is 82.57.
The situation in NSW and Victoria is also bleak – both states are reporting an RPI above the national average of 78.62.
In NSW, rents rose 10.8 per cent over the last year, meaning tenants are required to pay, on average, 32.86 per cent of their income for a rental, while the vacancy rate is down at 1.43 per cent. The RPI is sitting at 79.27.
Down in Victoria, rents have risen 12.42 per cent over the last 12 months, on average, with tenants required to spend 27.65 per cent of their income on rent. With a vacancy rate of 1.44 per cent, the RPI is 79.21.
Even in the states and territories presenting “a somewhat less dire picture”, Suburbtrends noted there is still “significant room for improvement in rental affordability”.
In the ACT, where there was a slight decrease in rents over the 12-month period, the vacancy rate is still at an objectively low 2.17 per cent, while tenants are still spending almost a quarter of their income on rent, on average, at 24.42 per cent.
In the Northern Territory, rents increased by 3.77 per cent over the past 12 months, with tenants required to spend 25.44 per cent of their income on rent. The 2.39 per cent vacancy rate puts the RPI at 59.06.
In Tasmania, a 1.99 per cent vacancy rate and the fact that tenants are spending 32.04 per cent of their income on rent raises the RPI in the state to 62.47, despite the relatively stable rental increase of 2.18 per cent.
Kent Lardner, the founder of Suburbtrends, said the latest findings highlight a “critical surge in rental distress across Australian suburbs”.
He conceded rental stress is not only persisting, but worsening.
“Western Australia and Queensland now lead the nation in rental hardship, with the majority of their suburbs facing unprecedented levels of stress,” Lardner pointed out.
“This is not just a market fluctuation; it’s a clear signal of a deepening crisis that requires immediate attention.”
“With rental affordability consuming upwards of 30 per cent of household incomes and vacancy rates at critically low levels, the situation for many Australian renters is becoming untenable,” Kent continued.
From his perspective, there’s a need for Australia to drastically rethink its approach to housing.
“Considering the success of mobile home villages in providing affordable housing solutions internationally, it’s crucial for Australia to explore similar alternatives,” he stated.
“Prefabrication technology could be a game changer, offering quicker, more affordable housing options to combat the rental crisis. Now, more than ever, innovative and bold policy solutions are needed to address this widespread rental stress,” he concluded.
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