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Rental affordability hits all time low, NSW tenants worst hit


If you’re renting a home in NSW, you might want to consider an interstate move. 

And, if you’re happy to change sporting codes and call your takeaway snack a potato cake instead of a potato scallop, then your move could be to the cheapest place to rent in Australia – Melbourne. 

The “Premier State” is now officially out of reach for a majority of Australian tenants.

That includes the Hunter region

On Saturday 9 March, REA Group’s data business PropTrack launched a new comprehensive measure of the share of rental properties that households can afford to lease.  

The PropTrack Rental Affordability Index analyses rental affordability across different household income distributions and locations.  

It shows rental affordability is now at its worst level in at least 17 years, when PropTrack records began, with median wage income earners able to afford just 28% of advertised rental properties.

Victoria has become the best state for rental affordability, with NSW the most expensive for renters.

The numbers it claims are driven by the surge in rent prices following the pandemic. 

“Surging rents over the past few years have resulted in rental affordability sitting at its worst level in at least 17 years,” says PropTrack senior economist and report co-author, Angus Moore. 

“Over the six months to December 2023, households across the income distribution could afford to rent the smallest share of advertised rentals since at least 2008, when our records began. That is a substantial change from conditions before and during the pandemic.  

“The deterioration in affordability has been driven by the significant increase in rents that we’ve seen since the pandemic, which wages have not kept pace with.  

“Rents nationally are up 38% since the start of the pandemic.” 

Who suffers most

The hardest hit it seems are the ones who can least afford it. 

“At the lower end of the income distribution, renting is extremely challenging,” adds Moore. 

“This highlights the importance of rental support for low-income renters, such as Commonwealth Rent Assistance. 

“Without support, renting would be effectively impossible for many of these households.” 

What is the solution  

“Longer term, increasing the availability and supply of rentals is critical to improving affordability,” says Moore. 

“Rents are growing quickly because rentals are extremely scarce at the moment, with incredibly low rental vacancy rates around the country.  

“The only way to solve that, sustainably over the long term, is to have more rentals where people want to live.  

“And, that means building more homes.” 

Fast facts: 

NSW has been the least affordable state to rent in almost every year since PropTrack records began in 2008, except 2019-20 to 2022-2023, when Tasmania eclipsed NSW as the least affordable state. 

The challenging level of affordability in New South Wales is, in very large part, driven by Sydney, which is by far the most expensive rental market in Australia. 

Sydney’s median advertised rent was $700 per week in December 2023, making it $100 more expensive than the capital city median. 

Renting in NSW has always been challenging for low-to-middle income households – at no time in the past 17 years has a household earning median income been able to afford even half of advertised rentals. 

A median income household in NSW could afford to rent just 28% of rentals advertised on in 2023-24. 

Households earning the median income of roughly $111,000 can afford to rent the smallest share of properties since 2008.  

Just 39% of rental properties advertised for rent on from July to December 2023 were affordable across the country for a typical-income household spending 25% of their income.  

Renters in NSW, Tasmania and Queensland face the worst affordability.

Low- and middle-income households are facing the toughest conditions. A household earning $49,000 per year – the 20th percentile of income – can afford essentially no rental properties.  

Victoria is the most affordable state to rent in, with a median-income household able to afford more than half of advertised rentals.  

From financial year 2018-19 to today, national median household income has increased 19%. Since the pandemic, median rental prices grew 38%.  

Rental properties at the most affordable end of the market – the 10th percentile – have seen faster growth in rents than those at the more expensive end of the market. 

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