Australian Renters Face Unprecedented Affordability Crisis
Securing a place to call home in Australia has become a significant challenge, with rental affordability plummeting to a historic low. The cost of renting has surged at a rate double that of income growth, leaving many Australians struggling to keep up with rising housing expenses.
According to a recent REA Group rental affordability report, the stark reality for many is that their wages are simply not stretching far enough to cover the cost of rent. For individuals earning the median Australian salary of $124,000, a mere 37 per cent of advertised rental properties were within reach between July and December 2025. This figure paints a grim picture, indicating that a substantial majority of available rentals are out of their price range.
The situation is even more dire for those on more modest incomes. Australians earning just under $75,000 annually could only afford a meagre 2 per cent of rental properties advertised during the same period. This highlights a widening gap in the rental market, where lower-income households are disproportionately affected by the escalating costs.
State-by-State Breakdown: Where the Squeeze is Tightest
The REA Group report also sheds light on the varying degrees of rental stress across the nation. New South Wales continues to hold the unenviable position of being the least affordable state for renters. Here, households earning a typical income could only manage to afford 25 per cent of advertised rentals.
South Australia follows closely behind, with renters in that state able to afford just 19 per cent of available properties. Western Australia also presents a challenging market, with only 24 per cent of advertised rentals deemed affordable for the average income earner. Queensland offers a slightly better, though still concerning, outlook, with 29 per cent of properties classified as affordable.
Victoria stands out as the sole state where rental affordability has shown improvement over the past 12 months. It has now emerged as the most affordable state for renters by a considerable margin, offering a glimmer of hope in an otherwise bleak national landscape.
The Long-Term Trend: Wages Lagging Behind Housing Costs
Senior economist at REA Group, Angus Moore, points to a decade-long trend of declining rental affordability. He attributes this to wages consistently failing to keep pace with the rapid escalation in housing prices.
“Rental affordability has fallen to a record low, with Australian renters facing the toughest conditions since at least 2008,” Mr Moore stated. His analysis underscores the severity and duration of this affordability crisis.
The impact of the COVID-19 pandemic has further exacerbated the situation. Mr Moore noted that national rents have climbed by a staggering 55 per cent since the onset of the pandemic in 2020. In contrast, average wages have only grown by a little more than 25 per cent during the same timeframe. This significant disparity in growth rates has created a substantial affordability gap.
The Escalating Cost of Rent: A Stark Comparison
To put the dramatic increase into perspective, national rental prices in 2020 averaged $420 per week. This figure has now skyrocketed to an average of $650 per week, placing immense pressure on household budgets across the country.
The surge in rental prices has been particularly acute at the more affordable end of the market. Between the 2018-19 and 2025-26 financial years, rents for these properties have jumped from an average of $280 per week to $450 per week, representing an alarming 61 per cent increase.
“On top of that, rent prices have grown faster for more affordable properties, making it particularly challenging for low-income renters,” Mr Moore emphasised. This trend means that those who can least afford it are experiencing the most significant price hikes, deepening the rental affordability crisis for vulnerable populations.
Even households at the higher end of the income spectrum are feeling the pinch. Those in the 70th income percentile, earning approximately $190,000 per year, could only afford 8 per cent of advertised rentals in the 2025-26 period. This indicates that the affordability issue is not confined to lower-income earners but is a pervasive problem affecting a broad cross-section of the Australian population. The current rental market conditions necessitate urgent attention and potential policy interventions to address the growing disparity between income and housing costs.
